When talking to international shippers, it’s clear that demurrage and detention is a critical problem in their supply chain operations. “Demurrage and detention fees are not in the thousands, but in the millions of dollars in fees for shippers,” said Shana Wray, Solution Consultant at FourKites. These fees have gotten so bad that the White House took notice — according to a White House fact sheet, the FMC estimates that from July to September of 2021, eight of the largest carriers charged customers fees totaling $2.2 billion — a 50% increase on the previous three-month period. This is why FourKites recently sat down with resident ocean experts, Chris Stauber, VP of Product, and Shana during our latest webinar, How to Tame Demurrage and Detention with End-to-End Visibility.
We discussed many of the challenges that cause accumulating demurrage and detention fees, but the underlying issue for many shippers is the same: not having a handle of where their containers are or when they will arrive. It is especially difficult as you add more freight forwarders or ocean carriers and transshipment ports. End-to-end supply chain visibility is a key solution that can solve a number of these critical challenges, allowing shippers to reduce their transportation costs, receive better ETAs and Estimated Time of Departures (ETDs) and increase customer satisfaction with on-time deliveries door-to-door.
In the simplest sense, using ocean freight visibility allows shippers to know where their containers are in real-time. It also reduces the manual phone calls or emails to ocean carriers by seeing all the container events and milestones in real-time. One challenge is that with more freight forwarders or ocean carriers, milestones and ETAs might be delayed or inaccurate, causing delays or excessive dwell time and, therefore, added demurrage and detention fees. With visibility, shippers receive the most accurate, predictive ETAs to know where the containers are in real-time, allowing them to make their transshipment ports, unloaded faster at the port or added to the next leg of the journey.
Chris and Shana walked us through the Demurrage and Detention product suite at FouKites. These include:
Monitor at a high level the containers that are (or soon will) incur detention and demurrage fees, receive real-time rerouting alerts and dwell time notifications for all ocean shipments.
Receive notifications and alerts for containers that are incurring (or soon will be) demurrage and detention fees. Use these alerts to proactively identify containers incurring these fees or about to incur fees and minimize the impact on transportation costs and increase customer satisfaction.
Analyze performance trends by lane, carrier, stop and more, to identify problem areas and improve supply chain operations, taking control over detention and demurrage costs.
“The capabilities are a great way for customers to build up a resilient supply chain so they can deal with all of the chaotic events in the past, but also whatever new chaos gets thrown into the international supply chain in the next months and years,” said Stauber. “What is clear is that demurrage and detention is already a critical challenge for all shippers and end-to-end visibility is going to be a requirement to be manage the international supply chain.” Through these capabilities, shippers are able to see lower their transportation costs, optimize the resiliency and efficiency of their supply chain and improve customer satisfaction.
To watch the full demurrage and detention webinar, click here.