How to avoid Detention or Demurrage
Attention Freight Forwarders: Two Tips To Avoid Wrongful Detention Or Demurrage For Your Client!
Imagine as a freight forwarder for a local exporter, you get a call or email from your client. They are furious because their most valuable customer receiving the containers at the destination has been informed that there will be demurrage by the shipping line imposed on multiple containers, after only 5 free days. Your client requested 14 free days to clear the containers, but the shipping line at the port of discharge is saying there are only 5.
Mistakes Can Be Costly
Now if you calculate that…14 days minus 5 days = 9 extra days of demurrage that your clients’ customer is being asked to pay. Multiply that by the number of containers, and it doesn’t take a math genius to figure out that this mistake could mean a significant amount of money.
The first thought is panic, trying to figure out what went wrong.
You remember agreeing with the shipping line 14 free days of demurrage at POD. You panic because you aren’t 100% sure you requested the 14 free days as your client requested.
What You Can Do To Avoid This Mistake
This actually happened to me recently, and I’m going to give you two tips so that if it happens to you, instead of panicking, you will sip your tea calmly knowing you’ve safeguarded yourself against any miscommunication with the shipping line, and more importantly saved your client from uncalculated expenses.
Tip # 1: Never forget to agree IN WRITING, on the free days before the booking.
In my case above, we had confirmed 14 free days before the booking within email correspondence. Furthermore, we did receive a reply from the shipping line in writing mentioning “We confirm 14 days free at POD.” This agreement by correspondence in writing is very important, as you will see.
Tip #2: Never forget to mention your free days on bill of lading
This is the most important tip. This will allow you to argue your case with the shipping line, without refute. Unfortunately, I had not requested the shipping line to write the number of free days at POD directly on the bill of lading. If I had done this, solving the issue would have been quick and easy, without question.
A Happy Ending
Fortunately, in our case above, the consignee refused to pay the shipping line, contacted their vendor, and allowed us time to solve the issue. If they would have paid the problem could have been drawn out longer to consolidate refunds, etc.
In the end, the issue was that the shipping line hadn’t input the correct number of free days on their system. A single typo created this very bad situation. Since we had the proof in writing, as mentioned in Tip#1, the issue was solved.
Although we did not have the days on the B/L as I suggest in Tip #2, Tip #1 covered thankfully. Since it was the shipping line’s fault, they corrected the mistake & updated their system.
Make sure to implement our two tips every single time, and avoid an unhappy client.
If you have questions or want to grow your network of freight forwarders, go to our website www.arabspanishmaritime.com and complete the “request quote” form, or simply call our export department at +2 0127 620 7631.
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Key Terms:
Demurrage is charged when containers are still full and under the control of the shipping line and has not been cleared or picked up by the consignee
Detention is charged after the containers have been picked up, but container (full or empty) is still with the consignee
