Demurrage is one of the many expenses that can drive shipping costs for shippers, forwarders, and BCOs. Most maddening is that a demurrage charge is an expense that typically could have been avoided.
How, though, do shippers, BCOs, and forwarders go about avoiding demurrage costs? Nothing is more valuable than real-time container visibility when attempting to limit demurrage freight. To help you lower your organization's demurrage costs at a time when most organizations can hardly afford for shipping costs to be any higher, let's take at what triggers a demurrage fee and how much they typically cost before exploring how real-time visibility solutions such as VIZION API can prevent demurrage fees while at the same time offering a wealth of other benefits.
What Are Demurrage Fees, and How Much Do They Impact Shipping Costs?
Demurrage fees are incurred when cargo is left sitting at the terminal for longer than the allowed time. These fees are typically enforced by port officials and will vary depending on how much cargo is at the terminal and how long it has been there.
The amount of time after cargo arrives at the port you are given to pick it up before demurrage fees are charged varies from vendor to vendor. In most cases, cargo arriving by sea will need to be picked up within four to seven days of its arrival at port to avoid a demurrage charge.
The charges themselves can vary from vendor to vendor as well. On average, demurrage fees range from $75 to $150 per container daily for the first five days. After five days, charges will generally increase the longer cargo is left at the terminal.
Simply picking up your cargo on time will completely prevent any demurrage fees. Without the right visibility solutions, this seemingly simple task is often easier said than done.
How Container Visibility Aids in Mitigating Demurrages Charges
Anticipating and preventing demurrage or detention fees first requires the ability to track the location and status of your cargo in real time. Suppose you rely on carrier ETAs alone to determine when to arrange pickup for your cargo. In that case, there will be many instances where your cargo doesn't arrive at the expected time, and you are left scrambling to arrange its pickup before it starts incurring demurrage charges.
With VIZION's real-time container tracking solution, shippers, BCOs, and freight forwarders can receive timely, detailed, and accurate tracking updates that are automatically pushed via API to any software system or spreadsheet. With reliable access to the most complete and up-to-date tracking data available, you can achieve complete supply chain visibility that enables you to ensure that your cargo is always picked up on time.
Mastering Exceptions Management
Managing by exception is one of the most powerful capabilities that real-time container tracking solutions such as VIZION API provide. While there is always the potential for disruption, demurrage fees and a broad range of other expenses and issues can largely be avoided when you can respond to exceptions as they happen.
Along with achieving the supply chain visibility required to anticipate exceptions, maintaining an open line of communication with your carrier(s) is also a key element of exception management. Leveraging real-time alerts and effectively communicating with carriers enables you to swiftly shift course and find alternative solutions when inevitable delays and disruptions that might otherwise lead to demurrage fees occur.
Reduce Demurrage Costs with Real-Time Container Visibility
As shipping costs continue to rise across the board, it is now more important than ever for shippers, BCOs, and freight forwarders to eliminate unnecessary expenses - and no expense is more unnecessary than demurrage costs.
By leveraging VIZION’s container tracking API to track the location and status of your cargo and receive real-time exception alerts, you can create an agile and transparent supply chain that is optimized for preventing delays and all of the issues they cause. To see how VIZION can help your organization enjoy the many advantages of complete supply chain visibility, book a demo of VIZION API today.