Freight Forwarding: What’s the deal with demurrage and detention?

Many importers complain about additional charges called demurrage and detention. Both can be frustrating to understand and seem to show up without notice. Here’s a helpful explanation about the two charges for import containers:

Demurrage (for rail ramps):

Demurrage fees are charged when import containers are discharged at the rail ramps and the last free- storage day expires before the container is picked up for final delivery. Free time starts when the container is unloaded from the railcar and placed in the rail ramp’s container yard. At that point the clock starts ticking and does not stop until the container is picked up by the trucker and out-gated from the container yard. Usually rail ramps allow 72 hours of free storage time, but it can vary.

Demurrage can be difficult to manage because of the limited time to get the container out of the rail ramp. During peak shipping seasons this can be very difficult at times because truckers are at capacity and might not be able to schedule a truck in time to get the container out before the last free day.

Plan ahead to avoid demurrage fees

Planning ahead and communicating is the best way to manage demurrage. Your freight forward should be communicating with your trucker in advance to communicate when the container is expected to arrive at the ramp. Then the trucker can schedule container pick up before the last free day. Truckers usually will track the container to make sure it is scheduled to arrive on time. They can make schedule changes if there are delays. Also truckers can pre-pull the containers into their yards to avoid missing the last free day, if there is a problem with delivering to the consignee on time.

If you see reoccurring demurrage problems, consider looking for different steamship lines and rail ramps that might be less congested and with professionals who are easier to work with. If you find a good trucker, stick with them and develop a good relationship.

During peak seasons it might be tough to completely avoid paying some demurrage. Working with your freight forwarder and trucker to find the best steamship line/rail ramp options will go a long way in eliminating as much demurrage as possible.

Detention (for import containers):

freight forwardingSteamship lines allow customers a limited amount of free days to pick up the container, unload the container, and deliver the empty back to the rail ramp. Container detention occurs when the customer holds onto the container beyond the allotted free days allowed by the steamship line. Most steamship lines allow customers seven free days to unload and return the container. If you keep the container out of the container yard for nine days, you will be charge two days container detention.

To eliminate chance of detention, manage the number of days it takes to unload and return the container back to the rail yard to within seven days.

If you have questions about demurrage or detention, contact Cargo Services at 800-645-0386.

 

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