In a recent report from the International Federation of Freight Forwarders Associations, it was stated that free time periods have been reduced and tariffs pertaining to demurrage and detention have been increased drastically. It is stated that the lines have used these increases to control the shippers. The idea is that the increased tariff will in fact force shippers to pick up and return containers much faster to not face demurrage or detention charges. Frustration throughout the shipping industry is very evident, as this tactic by the lines is believed to be a revenue builder for an industry with an increasingly tough business environment.
It is no secret that the container lines have been struggling over the past few years. We have seen the rise and fall of shipping rates almost with the wind. It would only make sense to the shipper that these increasing tariffs for demurrage and detention would be a revenue builder, not an incentive for shippers to react quicker. Most delays on a shipment are out of the shipper’s hands. There are many factors currently that lead to delays out of the shipper’s control, such as new mega vessels, labor issues, inadequate terminals, vessels schedules, weather, and increased security.
As the size of vessels is increasing the need for everything else involved with shipping will need to increase as well. With vessels being this large, carrying more containers, making more work at the port of loading, and unloading, we are seeing these increased out of the shippers control delays. More work meaning more containers will be arriving for loading, with more containers loaded, there will be more containers for unloading. When all these containers hit the port at once there are many issues such as having adequate labor, chassis, truckers, containers, and this is just the beginning.
In recent months it has become very evident that the trucking community cannot keep up with the number of containers arriving in port. Currently, this is causing most truckers to work on containers last free day for pick up. If there is any slip-up, such as the before mentioned, chassis shortage, labor issues, weather, inadequate port, and so on the shipper can be stuck without of their control charges from the line.
There is hope for relief as the FMC has been in an investigation of these current tariff changes since 2017. It looks as though the powers that be within the FMC will be looking for a business solution to this situation with the lines and will not resort to rulemaking if there is no need. Until this is situated, shippers need to be on top of current shipments to avoid excess shipping cost. FIATA has provided a best practice guide for protecting shipper, view it here.
Looking for a reliable freight forwarding company? Give Bruning International a call today at (800) 616-3349.