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September 04 2015
shipping

Demurrage : Firstly anyone must get to know this factor.

Demurrage is assessed on cargo that is left at the port terminal beyond the allotted free time. Free time in contracts can vary, so be sure to check yours to ensure you understand exactly how much free time you get. Generally, the standard is 5 days. Once that free time expires, you will be charged a daily storage fee (demurrage) until you pull the cargo from the terminal. Demurrage amounts may differ based on terminal or carrier and often increase after an initial period of time. Daily demurrage charges can typically range from min MYR +$40 to $60+ or more per container per day (Depends on Carrier/NVOCC) , but that’s just for the first 5 days or so. Charges generally increase the longer the cargo stays on the terminal.

How can you avoid or minimize demurrage? Here are three tips:

1.Pre-clear your cargo and issue delivery instructions to your inland carrier in advance. If you work with a proactive broker like us through our in-house licensed customs broker, your cargo will be pre-cleared whenever possible so that coordination with the truckers can begin well before free time expires.
2.Have a haulage or trucker “back-up” plan. If you’re dealing with a particularly congested port, having an alternate option for a trucker could be a life saver when time schedules become tight.
3.Request extended free time. This only works for large shippers though, since they are based on the volume of containers you have arriving on a vessel at any given time. You might be wondering how much shipping would get you to the “large shipper” status. That really varies from carrier to carrier but you’ll probably need to be moving at least a regular containers booking per week for an example to be even considered for this perk.

A final thought about demurrage: Because it must be paid before the cargo can be picked up from the port, you’ll often know about these fees early. While you can’t guarantee that you’ll never face a demurrage charge, advanced planning is the key to mitigating your exposure.

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