Demurrage is a tariff or fine that must be paid by the recipient or sender of the cargo due to the late return of containers who are still at the port after crossing the specified time limit. This fee arises because the shipping company suffered a loss when the container was stuck longer than scheduled.
In the export-import business, the use of containers has a certain period of time agreed upon. If it exceeds this time, the tenant will be fined in accordance with the provisions of the shipping company. Therefore, it is important to understand this mechanism to avoid unnecessary additional costs.
Demurrage period at the port
Each shipping company has a different policy related to the period of containers in the port. Generally, given between 7 to 10 days to load and unloading since the ship arrived at the port. If in this period the container is not returned to empty,
then the demurrage fine will begin to be calculated.
In some cases, shipping companies can provide a longer grace period, for example up to 21 days, especially if the goods sent requires additional administrative processes or special inspections before it can be dismantled.
Causes of demurrage fines
Several factors that can cause demurrage include:
The slow administrative process - unfinished customs documents can hamper containers.
Density at the Port - The surge in the flow of goods can cause delays in the loading and unloading process.
Land Transportation Delay - Constraints in transporting goods from or to the port can extend the duration of the use of containers.
Disagreement in the shipping contract - Changes in schedule or errors in coordination with shipping companies can result in delays.
Bad Weather - Extreme weather conditions can slow down loading and unloading activities at the port.
How to prevent demurrage fine
To avoid unwanted demurrage costs, here are some steps that can be taken:
Increase the efficiency of logistics management
Use a real-time monitoring system to monitor the movement of goods.
Avoid complicated bureaucratic processes so that documents can be processed faster.
Sign a clear and profitable contract
Make sure the agreement with the shipping company includes sufficient grace period.
Perform beneficial negotiations regarding the cost of fines in the event of a delay that cannot be avoided.
Optimizing Standard Operating Procedures (SOP)
Make sure all parties involved in the supply chain understand the efficient workflow.
Use weather forecasts to estimate more accurate loading and unloading time.
Preparing on time land transportation
Make sure the land transportation fleet is ready to transport goods immediately after the container arrives at the port.
Demurrage is an important aspect in managing export-import logistics that must be well understood. With careful planning, efficient management,
As well as a deep understanding of port policies and shipping companies, this fee can be minimized. Managing the export-import process will intelligently help the business run smoothly without being exposed to additional unwanted costs.
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