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Cargo Container Storage and Use Fees are Focus of Best Practices Guide

Friday, October 05, 2018
Sandler, Travis & Rosenberg Trade Report

The International Federation of Freight Forwarders Associations has released a guide providing best practices that may help lower detention and demurrage charges. Such charges are the subject of an ongoing investigation by the Federal Maritime Commission, with a final report due by Dec. 2.

Demurrage is a charge for a container exceeding its allotted free time at a terminal, while detention charges are assessed for the use of carrier-provided containers beyond the allotted free time. FIATA states that during the last few years free time periods have been reduced and charges for demurrage and detention have increased considerably, with shipping lines being accused of abusing such charges to increase income and profits.

This guide seeks to address this situation by identifying the legitimate reasons demurrage and detention charges can be incurred while outlining best practices that could be implemented to reduce unnecessary supply chain costs and inefficient behavior that lead to such charges. Issues discussed include delays due to bad weather, legal disputes, terminal congestion, or government action; deadlines related to advance manifest rules and declarations of verified gross mass; sailing delays; transparency; reductions in free time; and environmentally-driven modal shifts.

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