6 TIPS TO HELP YOU AVOID DEMURRAGE AND DETENTION CHARGES:

So in the last blog, we tried making sense of demurrage and detention. But why should an exporter or an importer know about them? Can demurrage and detention really hurt your bottom line?




The answer is YES. With rates varying from country to country and charges being calculated per day and per container, these penalties can blow up quickly and leave a dent in your profits. In some cases, the charges run so high that the shippers/importers are forced to abandon the cargo. To help you avoid facing such circumstances, here are 6 tips that you can follow. 

1. Plan in advance:
Time is money literally in logistics, and it's vital you use it to your advantage. Plan ahead always. By working out a mechanism to execute the loading and unloading of your cargo, arranging for pick-up and return, informing third parties well in advance etc., you can ensure smooth execution of all processes. Pre-planning also wins you the time to focus on unexpected problems that might crop up, without compromising on facilitating the execution of the routine processes.  

2. Do your research:  
The shipping world can be quite tricky when it comes to terminologies, policies and costs. With different countries and shipping lines observing different regulations and procedures, it's necessary that you do your research and reading well before committing to anything. This one step will go a long way in making sure you are not met with any expensive surprises.  

3. Documentation:
Whether you're a shipper or an importer, make sure you have everything covered from your end in terms of paperwork. If you need to obtain documents from another party, inform them well in advance so that everything goes smoothly for you. Learn about what you require and make checks before hand to ensure your document work is up to the mark. 

4. Be as specific as possible:
While dealing with shipping lines, make sure you are clear about all their clauses regarding free days, charges etc. If you require additional free days, make sure you specify what's it for - demurrage or detention. Clarifying these minute details in advance can help you negotiate smartly and minimize the risk of unexpected penalties. 

5. Always have a back-up plan:
Things can always backfire when you're in the shipping business. With multiple resources at play and uncertainty being an unavoidable aspect, having a contingency plan is indispensable. Planning for the best but staying prepared for the worst is the smartest way to mitigate the risks of delays and costly fines. 

6. Freight forwarder / NVOCC:
 Hiring an experienced freight forwarder can greatly simplify managing all this. Using their knowledge and expertise, you can really save time and have a better grip at things. With most of the groundwork taken care of by the freight forwarder, you just have to focus on what they require of you versus you solely carrying the onus of strategizing and following up on every tiny detail.  


Do let us know what you have to say about this. 

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