ESC encourages a continued dialogue between logistics partners to bring more clarification on detention and demurrage charges, what these concepts mean for the partners in shipping business and in what circumstances the charges apply. In this regard, ESC welcomes the Best Practices Guide for Demurrage and Detention Charges in Container Shipping published by the International Association of Freight Forwarders Associations (FIATA).
The guide outlines scenarios where shipping lines ask shippers and consignees to pay charges for the delays in returning the shipping lines’ containers and other equipment. Often these delays go beyond shippers’ control (customs inspection, port congestion, or a regulatory compliance in pre-export procedures) or their justification is questionable. Along the scenarios, FIATA suggests practices and arguments to consider for commercial partners in their negotiations.
Demurrage and detention charges are an important tool for shipping lines to ensure the efficient use of their container stock which represents a substantial investment. For them, it is essential to turn around their containers as fast as possible. At the same time shipping lines are obliged to provide a reasonable free period to allow the merchant to load and deliver the container for an export and to pick up, unload, and return the empty container for an import.
However, during the last few years, free time periods have been reduced and tariffs for demurrage and detention have increased considerably. Shipping lines have been accused of abusing their position by charging unjust and unreasonable demurrage and detention to the merchant.
