port, container, export

How to Avoid Demurrage

Demurrage, detention, per diem – all charges that cargo owners and truckers want to avoid. In the case of demurrage, the charge can run as high as $150 per day or even more depending on how long a container has been sitting. We at SecūrSpace often hear from shippers and truckers looking for solutions to avoid these charges.

Back in December 2016, complaints from the shipping and trucking communities were brought to the attention of the Federal Maritime Commission (FMC) by the Coalition for Fair Port Practices, prompting the commission to launch an investigation earlier this year to examine the rules and practices surrounding demurrage and detention charges. An interim report released by the FMC found that these fees rose by about 30% in 2017. Additionally, A.P. Moller Maersk recently reported a $2.5 billion increase in revenue partly driven by “increases in detention and demurrage.” 

On December 3, the FMC released its final report on the subject. The findings recognize detention and demurrage as important tools for moving cargo from terminals within the confines of “transparent, consistent, and reasonable” practices and consistent notice of cargo availability.

As to next steps, the report recommends that the FMC organize Innovation Teams to further explore standardizing language, creating simplified billing methods, developing standards for evidence relevant to disputes, and diving deeper into how cargo interests are notified of container availability.

While there are many challenges that cause an excess of demurrage charges, some of which are driven by operations at the terminals themselves, one often cited is readily available space near the ports to drop containers. The nation’s largest ports and rail hubs are nearly all located in major metropolitan areas. Real estate is expensive and limited. Without a viable alternative, containers may sit and collect demurrage for days simply because there is nowhere else to put them.

Enter SecurSpace

We have been working diligently to build a network of drop yards near rail and marine terminals that will ease congestion and help shippers and truckers avoid demurrage charges. A single space in our network typically costs no more than $25 per day, many times it’s less, which is a fraction of a demurrage charge. It is fairly common that SecūrSpace customers secure several spaces on a monthly basis to ensure they have a reliable solution when containers are on the verge of overstaying their welcome at the terminal.

If you are swallowing demurrage charges and the lack of convenient, accessible yard space is one reason why, reach out to us today for help securing parking and storage at one of our partner locations.

If you’re facility is located in a port or rail city and you’re interested in learning how you can help alleviate this problem while earning thousands in extra revenue per month, we’d love to hear from you.

Editor’s note: This blog was originally written for SecurSpace, Looking To Avoid Demurrage?

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