Importer Tips: How to Avoid Shipping Storage and Demurrage
If you’re new in the importing or exporting world, you might be surprised to receive an unexpected bill showing demurrage, storage & detention charges – terms that you haven’t even heard yet, let alone know the cause. Or you might have experienced this already for some time now, but either way, these costs might hurt your pockets big time. So, to clear up your confusion, let’s talk about when you might see these charges, and how you can avoid them.
Storage
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Storage charges accumulate at port facilities, airline terminals, and bonded warehouses when a container remains at the site beyond the allotted “free days” provided by the airline, warehouse or Arrastre operator after arrival.
Storage Fee- with standard rate for FCL (see PPA memo). Standard Free time 5 days.
for LCL (see BOC CMO 41-15)
Cut your losses by following these tips to avoid storage cost:
- Ensure that there are no issues with the shipping documents. It is the common reason for delaying the release of container.
- For regular cargo, consider a Seaway Bill of Lading/Telexed Release instead of an Original Bill of Lading.
- Always keep a keen eye over your shipment and the arrival of the vessel, so you will know exactly when you free time initiates and expires.
- Advise broker for immediate releasing.
Demurrage
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Demurrage fee is levied by shipping lines for containerized shipments only, however, this fee is charged when the containers are still full and has not been cleared up by the consignee within the seven (7) days free time & extendable as per approval of the shipping line.
Menacing as it is, here are some tips to avoid demurrage charges:
- Talk with your freight forwarder and know in advance a number of free days granted.
- Dispatch your shipment as early as possible. Excelsior Worldwide Logistics can help you clear your cargo ahead of time provided that all documents handed in a timely manner.
- If your shipment comes in volumes, you may request an additional free time from your freight forwarder or carrier. (Most often, the volume of your shipments should be close to 1,000 containers per year to be granted for extended free time.)?
- Ensure that your trucking company can pick up the shipments within the allotted free time, and a trucker has been assigned to your shipment. Set-up a backup or alternate trucker in the case of any circumstances that will prevent them from picking up your cargo in a timely manner.
- Analyze all the papers containing the terms and conditions of your transportation, warehousing, and sales contracts to find out the situations under which your company may be held responsible for demurrage charges.
Detention
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When the container has been picked up and out gated from the terminal, it must be returned within 72 hours otherwise detention charges will be imposed.
As always, it is important to seek the help of a licensed customs broker and freight forwarder to help you avoid or lessen this unplanned additional charges you might incur in importing/exporting process. They can help you understand the whole shipping process, and makes sure that you stay ahead of schedule and your cargo will move in a timely manner.
Allow Excelsior Worldwide to help you ensure a storage free -demurrage free clearance of shipments. Contact us today to learn more about our global logistics. Call (063) 5259775 or visit our website www.excelsior.ph