What is Detention?
Have you seen this word on an unexpected bill lately? Detention is one of those terms in the shipping industry that gets thrown around a lot, often with a few different definitions. Most commonly, detention refers to the fee associated with keeping a carrier’s equipment for too long—namely containers. Detention is frequently confused with demurrage, which makes sense because the two often come hand-in-hand. Demurrage, though, refers to the fees charged for storing a shipment at a terminal for too long. You can read more about it here.
Detention occurs when a consignee keeps a container away from the specified port, terminal, or depot for longer than the free time allotted. The charge, often called a per diem (per day) fee, typically ranges from $50 to $100 per day until the equipment is returned.
How Does Detention Work?
While detention and demurrage do often happen together, the way they’re enforced and paid are important differences to know when the charges show up. Demurrage is enforced by, and therefore paid to, the port or terminal where your shipment is being stored. Detention, on the other hand, is paid to the carrier that owns the container that’s being used. It’s also charged at the destination, rather than the port of entry.
When you keep a container for longer than its set free time, the carrier will likely bill your drayage provider for it, who will then pass those charges onto you. When these pop up, it’s important to act quickly to return the equipment, as these fees are charged on a daily basis, increasing your costs with each passing day. If you find yourself being billed for these detention or demurrage, it’s wise to check both terminal records and the proof of delivery from your carrier to confirm dates and times. With so many moving parts, it’s not unusual for these fees to be billed accidentally or incorrectly. When these fees are billed, however, they’re rarely negotiable and must be paid promptly.
How Do I Avoid Detention?
Know Your Contract
Luckily, detention free time is usually much more lenient that demurrage. Make sure you know exactly how much free time you’re allotted before you have to return equipment and plan accordingly. If you have a strong relationship with your carriers, or work with a forwarder who does, make sure you’re trying to negotiate for as much free time as possible. Depending on the strength of your contract, leveraging these relationships could be the difference between having four free days or 14.
Pre-Clear Your Cargo
Like most things in supply chain and logistics, you can save yourself from paying detention fees by planning in advance. Make sure you’re clearing your shipments as early as you can, so that you can schedule your drayage and trucking services as far in advance as possible. Oftentimes, your trucker or drayman will know the ins and outs of your ports, making it easy for them to save you time and money, keeping things moving within your free times.
U.S. Customs allows shipments to be cleared up to five days before arrival by ocean, as soon as you’re “wheels up” by air, and five days before arrival at final destination by rail.
Utilize Express or Electronic Releases
By speeding up your ability to get your cargo into the hands of your trucker or drayman, you can reduce your risk of keeping your container for too long throughout the rest of the process. Utilizing an express or electronic release makes it easier for your freight to get out of the port and on to your unloading point.
With most things in logistics, it’s best to plan and do as much as possible in advance. Perhaps the easiest way to delay the return of a container to your carrier is to take too long unloading it. Make sure you know your arrival times and free times for each shipment so you can plan accordingly with warehouse staff for unloading, storage space, or transit time. Making sure all parts of the puzzle are in order ahead of time allows each person involved in your supply chain to do their job well.
Many 3PLs, like Navegate, provide customs brokerage, drayage, domestic trucking, and other services under one roof, allowing for more seamless collaboration and planning between each stage of your product’s journey. Combine this with best-in-class visibility and management software, and you’ve got a supply chain that can easily avoid excess fees and adapt to any circumstance. To learn more, contact Navegate today.
Photo by Ivan Bandura via Unsplash.