New Methods to Reduce Demurrage Charges. Learn How to Avoid Demurrage and Detention.
Your logistics expenditures include a sizeable amount of your shipping demurrage charges. To examine and optimize them, you need a tool. Real-time cargo monitoring gives you the necessary information about the whereabouts of your shipments at any moment, helping you to streamline your cargo and save demurrage costs. We already discussed what are demurrage expenses.
And how to avoid them in our previous article. Now let’s have a look at how to avoid demurrage and detention cost.
Some proven ways to avoid demurrage and detention fees are:
- Planning and preparing in advance
- Tracking containers using visibility platforms
- Use the data
Following these methods to reduce demurrage costs will give you success and is sure to minimize your demurrage in shipping expenses.
Additional Ways to Get Rid of Demurrage Charges and Detention Fees
Being proactive about your cargo, setting up shipping goals, and defining INCOTERMS are some of the most needed steps to avoid demurrage and detention fees.
However, there are some other methods to prevent demurrage and detention costs as well. If you adopt these methods and inculcate them in your workflow, you can reduce the extra shipping costs significantly and may eventually be demurrage free at many ports.
- Analyze the Goods: Determine the kind of your goods, the port to which they will be delivered, and the routes they will take. If you know your goods will take quite some time to pack or unload, let your driver know ahead of time, so they can prepare for any delays.
- Implement Automation: Use technology to boost the flow of your processes, even if you’re a marine freight forwarder or an air freight forwarder. It will not only help you reduce time-consuming manual operations, but it will also assist you in ensuring conformity, efficiency, deliverability, and profitability.
- Plan Well: Shipping delays are frequent, and as a consequence, firms frequently pay additional costs for which they were not prepared. Ensure that the package arrives on schedule. Prepare your stuff carefully ahead of time. Give yourself some wiggle room. Consider probable delays while scheduling the loading and unloading times.
- Prepare Documents in Advance: Keep all of your paperwork organized for customs clearance. Make sure the information on all documents, including your invoice, bill of lading, and certificate of origin, is accurate. Inconsistent information will not only cause issues during the customs process, but will also prolong the shipping procedure.
- Bargain: Instead of taking a quote as-is, bargain the demurrage and detention fees.
- Ask for Free Days: Negotiate with port authorities or shipping companies. For example, you might ask for extra free days for your goods and avoid paying for demurrage and detention. Port officials frequently provide shippers with a lot of cargo extra time.
- Have a Backup Plan: Be a smart project freight forwarder and always be prepared with a Plan B. You may reduce the cost of demurrage and detention if you have got a backup plan in place. For instance: If you anticipate managing a busy port, look for alternatives if at all feasible in case the schedule gets constrained. This will provide you with some flexibility if necessary and instances, where demurrage was charged to shipment, will be reduced.
- Efficient Communication: Throughout the procedure, make sure you adhere to the communication protocol. Ensure that all of your collaborators, customs officers, and terminal authorities are in agreement. It will aid in avoiding any unneeded delays.
- Put Data to Work: Use historical data to identify demurrage hotspots and learn more about their causes. Compare the actual time your cargo will spend at particular ports or terminals to the reserved time slots. Stop spending too much and modify your planning depending on actual data.
- Even while these fees can’t always be avoided, they may be greatly decreased with thorough preparation and open communication.
- All supply chain participants can be informed beforehand when a pickup is necessary by relying on real-time information on a container’s status.
- You may lower your demurrage expenses by streamlining the shipping process using notifications by email, SMS, or data via an API.