Understanding the ins and outs of per diem detention charges associated with increased delays when returning equipment — as well as the costs associated with delays and spending unnecessary time at the port, also known as demurrage — is vital to effective ocean shipping cost control. Unfortunately, today’s shippers are under increased pressure due to capacity constraints. According to Supply Chain Dive, “Record volumes at ports have stressed the supply chain for months, creating container shortages, clogging ports, and hiking dwell and truck turnaround times.” That is why it is critical for today’s shippers to know a few ways to help reduce the risk of demurrage charges and avoid per diem detention charges at the same time. Let’s take a look at six tips to do just that.
1. Request Extended Free Time When Indicators of Delays First Appear
The chances are good you have requested a late checkout time at a hotel at least once in your life. Believe it or not, port authorities often offer a similar service known as extended free time. In fact, free time is a hot commodity these days, especially as volume soars. However, there is no harm in asking for extended free time. Regardless of what happens, ocean shippers should always start by requesting extended free time as soon as the first indicators of potential delays or disruptions in transport or unloading appear.
2. Ensure Containers and Equipment Are Returned Quickly
The best way to avoid per diem detention charges is simply to get equipment back to the dock on time. Of course, that requires shippers to have the foresight to properly plan inland drayage moves well in advance of a ship’s arrival. And in turn, that amounts to increased use and understanding of APIs to track real-time ocean container tracking whether at the port, traveling inland, or otherwise at sea.
3. Dispatch Cargo Further in Advance
In ocean transport, a delay could amount to rolling cargo for your freight or another shipper. While it may not be possible to eliminate the risk of rolled cargo, the better option is to plan for the risk of it well in advance. In other words, it is essential to dispatch cargo as far in advance as possible without risking damage, spoilage, or other adverse events to the shipment. That is the best way to get ahead. Now, that does go against the standards of lean inventory and replenishment strategies. However, the trick is to leverage data and understand the overarching view of global transportation to plan those replenishment and ocean shipment transport needs in advance and consider a realistic timeline for the actual arrival and the implication of risk that could delay the cargo.
4. Schedule Drayage With the Cargo Clock in Mind
Another essential strategy for reducing the risk of demurrage charges and keeping per diem detention in check is to schedule drayage with the cargo clock in mind. Every port will set the standard for how long shippers have to unload the ocean liner and get cargo off the dock. This is the basic principle and guiding force behind every port authority. As such, shippers need to schedule all drayage moves with that clock in mind. In addition, the inland drayage moves and the need to stay mindful that the cargo clock does not end as soon as freight leaves the port. Instead, it must consider any potential delays that may arise when moving freight from the port to a nearby warehouse or distribution center and the transit time it takes to return equipment to the port.
5. Track Real-Time Container Location, Status, and ETA
Another way to help avoid demurrage charges is to simply monitor real-time container location, status, and estimated time of arrival (ETA). Port authorities will not excuse a lack of planning on the shippers’ part as a reason to waive detention demurrage charges. And using predictive analytics, an advanced system could isolate containers at risk for rolling, identify when they will arrive, consider the influence of other risks, such as the weather, and provide it all within a single resource. Therefore, shippers can stay apprised of the situation at all times.
6. Keep Everyone on the Same Page With a Collaborative Freight Platform
The final step to help reduce the risk for per diem detention and demurrage charges is perhaps the simplest one and easiest to overlook. While shippers may understand what is happening, that information lacks all value if it is not shared with the applicable carriers that will actually be moving freight from the port to a nearby distribution center and getting the equipment back to the dock. In other words, everyone needs to stay on the same page with a collaborative, API-driven ocean container tracking platform that provides full visibility across the entire shipment lifecycle. And part of that involves tracking the real-time container status and location at all times.
Avoid Demurrage Charges With the Real-Time Ocean Freight Visibility of OpenTrack
Everyone in the supply chain has the same goal: keep overhead expenses as low as possible and achieve increased throughput. In ocean shipping management, this amounts to planning for all potential disruptions accordingly, continuously optimizing routes, and staying on top of detention and demurrage charges. With all the technology available today, shippers have no excuse for merely hoping that freight arrives on time without added expenses. Thus, more shippers are turning to ocean freight visibility platforms like OpenTrack to do all of the above and keep actual tabs on the data at all times. Book a demo of OpenTrack to get started today.
