Ashley KlepachProduct Marketing Manager, FourKites

The ocean shipping industry is in chaos, with vessel delays, incorrect or incomplete documentation, and potential stockouts for the holiday season. Now, as a result of ongoing port congestion, ports in California announced that they are going to charge additional fees for longer dwell times. Because of these delays, one of the cost drivers for shippers is accumulating demurrage and detention fees — but these fees are not insignificant. Demurrage and detention fees are reaching thousands of dollars per day and can exacerbate already high transportation costs for shippers.

How can shippers minimize unnecessary demurrage and detention fees in international shipping as the holiday season approaches?

To paraphrase Sarah Barnes-Humphrey from Let’s Talk Supply Chain, best practices include:

  1. Knowing the challenges. It is crucial to be proactive and constantly aware of what’s occurring across your potential routes. Anticipating how likely delays are at ports, for example, enables you to explore alternative lanes. Additionally, when it comes to saving on transportation costs, it is important to measure historical data to analyze performance trends and make impactful changes for the upcoming year.
  2. Mastering exceptions. Though there’s always the potential for disruptions, it’s possible to reduce or avoid unnecessarily high costs by maintaining open lines of communication. Staying in close contact with carriers and other key partners ensures you can quickly shift course when disruptions occur. Real-time alerts can also help avoid unnecessary fees — otherwise, by the time you realize your containers are incurring fees, it might be too late.
  3. Maintaining document visibility. On average, 9-12 documents are required for each international shipment. And these documents can require upwards of 200 emails between parties. In addition, your shipments could require specific documents based on the region, product or materials in the container. By not having the correct or completed documents, you are risking unnecessary demurrage and detention costs, delays and a reduction in customer satisfaction for this holiday season

While this is all sage advice, it is certainly easier said than done — especially without the proper systems and processes in place. In response, FourKites has released new Demurrage & Detention Dashboards and alerts that allow shippers to prioritize and minimize containers that will incur fees.

Exception management

Shippers are able to prioritize containers that are currently or about to incur demurrage and detention fees from a high-level viewpoint with the Demurrage and Detention Exception Dashboards. Not only will they see the containers to prioritize, but shippers can see dwell time notifications and real-time rerouting alerts that allow you to manage the exceptions in the moment.

Analytics and performance metrics

With the Demurrage & Detention Analytics, shippers can view performance trends by carrier, lanes, stops and other areas for bottlenecks, cost drivers and other analysis. This can help save on their transportation costs, and it can also increase customer satisfaction.

Proactive notifications and alerts

Get alerted — within the platform or via email — on key ocean milestones or when your loads might start incurring fees. These notifications are customizable by a number of factors so you can be proactive for your shipments and make sure your inventory gets to customers on time and in full.

Correct and on-time document management

Why risk an increase in your transportation costs with something that is preventable, such as an incomplete document? FourKites’ ocean customers were able to improve their accuracy of completed documents to 95% — up from less than 50% and accounting for millions in fees — by using a digital hub for document management.

When it comes to international shipping, many shippers cannot get away from eliminating demurrage and detention fees due to delays and port congestion. By using exception management and proactive alerting, shippers can minimize these fees as a way of lowering their transportation costs and maintain a competitive advantage.

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