SHIPSGO ACADEMY

How do I get rid of high demurrage costs?

Apr 11, 2019

FACT:

Demurrage cost is levied to the BCO (Shipper) in cases where they do not take the container out of the port/terminal area for unpacking within the allowed free time. Although Demurrage fee is designed to discourage use of terminals for long-term storage, and to improve equipment utilization, it can be a big cost for a BCO. When the free time of the port ends, daily costs range from $75 to $150 starts to charge per container per day; however, charges do increase the longer the cargo stays on the port/terminal. Suppose; you have five days of free time. After that, a charge of $100 per day applies for five days. From 4 to 10 days, the fee rises to $250 and finally to $350 for any day exceeding ten days. If picking up your container was delayed for 14 working days, your cost would be according to the calculations of Shapiro:

14 days3 days free time = 11 days of demurrage

($100 x 3 days =$300) + ($250 x 6 days = $1,500) + ($350 x 2 days = $700) = $2,500 per container

You have to pay these fees in advance to recover your cargo. If you have five containers in that shipment, your cost would be $2,500 x 5 containers, or $12,500!

SOLUTION:

ShipsGoRelease alert” and “gate out notification” are the innovative services that our customers benefit and to reduce their demurrage costs. ShipsGo users get a message if their container is not released from the port within free time days. In addition to that, they receive “Gate Outnotification of their discharged containers.