Freight detention and demurrage charges are no less than a nightmare for a freight importer/exporter. If not taken care of, these can add up into a significant “extra” amount, which will be on your bank account. To help you with it, we are sharing the best ways to avoid freight detention charges in this article. Keep scrolling!
Freight charges, if not taken care of, can easily overtake the shipment cost.
What Are Freight Detention Charges?
Detention charges are one of many kinds of freight charges. Normally, what happens during a shipment is, once a discharged /fully loaded container reaches the customer’s port and offloaded, it needs to be returned to the source port (aka empty container port) from where it was picked in the first place.
If the customer delays in returning the empty container and exceeds the deadline, the carrier starts charging a certain amount as a penalty or kind of “late fee” from the consignee or the customer. And these “extra” freight charges are known as detention charges. Just like demurrage, these charges are imposed on a per day, per container basis.
Freight detention charges are generally available. However, if not controlled due to some reasons, they can add up and overtake the price of your shipment which will leave the customer with no option other than to abandon the cargo altogether.
Ways to Avoid Freight Detention Charges
Freight detention rates can be avoided by proper planning.
Below are some great ways to avoid the freight charges :
1. Get Ready With An Experienced Team
The first and perhaps the most important thing to do in order to deal with the detention charges is to have an experienced team ready by your side. This team should be familiar with the complete loading and unloading process, deadlines, detention charges, freight rates, and so on.
Plan everything in advance and make sure that the products are ready and well-packed. Also, stage the shipment in a way you would prefer to load. In case you have a multi-drop shipment, make sure that the items that need to be delivered first are placed close to the doors.
Moreover, if you’re a customer or the consignee, then make sure to keep your dock clear and ready to offload the cargo. Make sure to preplan the unloading.
2. Extend The Dock Hours
There are a lot of unforeseen events that can occur due to a multitude of reasons such as traffic, pick-up delays, hold-ups, weather conditions, poor road conditions, and so on. Most of the time, simply being stuck in traffic can make the truck late. And although it is not the responsibility of a shipper to accommodate this kind of delay, it may be a better idea to do so. By extending the warehouse or dock hours beyond normal, it offers the drive a little more flexibility. It not only ensures a healthy freight movement but also strengthens your relationships with your business partners.
3. Have a Back-up Dock Ready
Once a driver arrives to load the shipment, the countdown begins right at this moment, assuming that it is within the negotiated window.
At this time, it doesn’t matter if the warehouse is full and congested, the team is busy handling another shipment or simply the dock is held by another team. Once the truck is parked, you’re reaching closer to the detention charges with each passing minute. Hence, it is very important to get ready with your “Plan B”. A solid backup plan will help you get going according to your schedule despite the unexpected delays.
4. Try Negotiating Extra Time in Advance
All the shipments are not equal. Some take minutes to load, while others can take hours. If your shipment falls in the latter category, is difficult to handle and you know that it will take extra time to load, then it’s better to negotiate extra time beforehand.
Some examples of this type of difficult shipments include oversized loads or the ones assigned for delivering limited access areas. Although the normal load time is fixed at 2 hours, if you’re in a good position to negotiate or have a good bond with the carrier provider, then there is no harm in requesting extra load time by giving them your valid reasons. If not free, you can ask for discounted load time. The good thing is, most carriers will agree on this.
5. Make Sure Your Loading Equipment is in Right Condition
Go back to the time and count the number of times your shipment was held just because of the unavailability of the right loading equipment. Surprised, aren’t you?
Having a liftgate is not possible for every truck driver. In fact, it is very rare. So, make sure that both loading, as well as offloading stations, should have proper loading/unloading equipment ready, a forklift for instance. If you’re moving a large or complicated freight such as machinery or heavy equipment, then cranes and other loading equipment should be available along with a certified team of handlers. Additionally, both the involved parties must do their homework and plan for the scenarios that are expected to happen at the loading/unloading stations.
6. Get Your Paperwork Done in Advance
Freight shipping involves a lot of paperwork, every shipper knows that but still, some of them take it lightly which later costs them in the form of extra freight charges. Generally, a shipper needs to have at least a bill of lading and a few extra documents including the invoices, hazmat documents, insurance certificates, etc.
If you’re shipping from china to usa across the border, then there are numerous pieces of information that will be needed by the carrier as well as the border officials. Having these important documents prepared in advance will save a lot of time and will help the freight move smoothly without any delay and according to the decided schedule. This is by far the best thing you can do to avoid certain types of freight charges.
Unexpected freight charges pushed on a freight bill always remain unwelcomed. While the freight detention charges are common, they can be avoided by taking care of certain things in advance. Simple measures during the packaging and preparation phase and being flexible with your carrier partners can help you prevent these extra freight charges.