Wednesday, June 10, 2020

Container Demurrage and Detention Charges Vary Widely Around the Globe

New Report Sees How Costs of Boxes Stack Up
Shipping News Feature

WORLDWIDE – Information is power as the old saying goes, a phrase particularly relevant as ever increasing streams of statistics become more widely available, plus it is always interesting to see how suppliers charges stack up against each other. This is true of any business, and shipping and logistics has always been about the bottom line and getting value for money, and now those with interests in the container freight market have another source of data to consider.

Demurrage and detention, two words which can make an average freight forwarder look as if someone has walked over their grave, never intended, but often encountered, such costs can not only eat into profits but sometimes make them disappear completely like a thief in the night. It would be a rare bird indeed who investigated such costs in advance of shipment, almost an invitation to disaster, however they remain often in the thoughts, particularly when certain types of goods, or indeed customers, are involved.

Now thanks to months of work by Container xChange there exists the possibility to see how those relative costs stack up against other competitors. The company has produced a comprehensive report collecting data from the world’s ten biggest box carriers on what those lines charge across 20 of the largest global ports.

xChange says this is the first time that a document has been produced showing full transparency on demurrage and detention charges. After all with costs as high as this, who would want to advertise the fact, particularly when the disparities in rates are so vast? The statistics below are a sample of 20 foot dry cargo container (DC) charges.

For 20DCs on day 14 only, Busan (South Korea) is the cheapest port with on average only $6.46 per day compared to Los Angeles (US) with $196.88 per day. The average across all of the 20 biggest ports is on $35.14 added in demurrage or detention charges on day 14 for a 20DC, the maximum is $241,87, again, in Los Angeles. On average, shipping lines offer 6.74 free days across ports.

Both demurrage and detention charges rise quickly after initial free-days to $123 after 7 days and $537 after 14 days across ports and shipping lines for 20DCs. Merchants have on average 5.89 free days across ports for 20DCs, afterwards demurrage & detention charges are levied.

The report is not only a source of comparative rates but explains the nuts and bolts of what the charges are actually for, defining the terms and explaining how they are arrived at. It also contains an online linked, instant Detention and Demurrage charges calculator. Best studied in full the report can be downloaded for free HERE.