In recent years, the global shipping industry has seen a significant increase in demurrage and detention charges. These charges, which are incurred when shipping containers are left at ports for too long or when empty containers are not returned to the port in a timely manner, have been on the rise due to port congestion caused by capacity struggles, labor shortages, and bottlenecks.
In 2021, the global average for demurrage and detention charges increased by nearly 40%, with shipping containers being left at ports longer and empty containers taking longer to be returned to the port. Despite a slight decrease in demurrage and detention charges in 2022, some ports, including Los Angeles and Long Beach, still saw charges above pre-pandemic levels. As a result, regulators have taken action to address the rising costs. The International Federation of Freight Forwarders Associations (FIATA) has called for shipping lines to return to pre-pandemic free time periods before demurrage and detention are charged, while the Ocean Shipping Reform Act (OSRA), passed in 2022, requires ocean carriers to certify that their detention and demurrage charges comply with federal regulations.
Shippers can take steps to reduce demurrage and detention charges by gaining real-time visibility into shipping containers’ locations and status updates. This allows shippers to pinpoint when containers should be collected and better coordinate with drayage providers. BlueCargo offers port and terminal connections for alerts, notifying shippers of their last free day, when fees will begin, and when containers are available for pickup. Additionally, real-time container tracking provides supply chain visibility, enabling shippers to monitor their freight shipment locations and statuses in real-time.
In conclusion, demurrage and detention charges have become a growing problem in the global shipping industry. However, with the right technology and visibility, shippers can reduce these charges and improve operational efficiency. As regulators continue to address the rising costs, it is important for shippers to stay informed and take advantage of the available resources to avoid unnecessary spend.
