Freight forwarders have once again raised their objections to what they believe are unfair and costly demurrage and detention fees. In the past few years forwarders and cargo owners have become increasingly outspoken about the manner in which these fees are assessed, even accusing shipping lines of abusing their position by charging fees for situations out of their control. It is not the principle of demurrage and detention that is being questioned, says Jens Roemer, chairman of the International Association of Freight Forwarders’ Associations (Fiata) sea transport working group. “Demurrage in itself has a sound purpose in that it encourages the return of containers to shipping lines as quickly as possible.” But, says Roemer, there is a vast difference between discouraging the practice where containers are kept for long periods of time and what would be considered a reasonable amount of free time to load, unload and return boxes. “In the past few years free time periods have been reduced significantly and tariffs for demurrage and detention have increased considerably,” he says. Demurrage and detentions apply when import containers sit in container terminals and depend on how long shippers hold containers outside marine terminals. Mike Walwyn of the South African Association of Freight Forwarders (Saaff) says it is a global problem, but especially a concern in regions where government and other port authorities are not able to provide speedy services. “In South Africa, the law dictates that any container that has to be moved for a customs inspection must be transported by the shipping line and it is more commonto see that container only transported a few hours before the three-day free period expires rather than on the first day.” In addition, forwarders have no control over subsequent government delays during customs clearing of containers. This means that demurrage is just about a given for every inspection. Starting at around $50 per day, the figures quickly add up. What makes the matter even more problematic, says Dave Watts, a consultant for Saaff, is that the demurrage invoices are often delivered weeks after the cargo has already been delivered to the client. “The freight forwarder is then expected to foot the bill. It is an untenable situation and it cannot continue.” This, says Roemer, is being experienced all around the world. Earlier this year the Court of Appeal in Antwerp in Belgium ruled that costs of demurrage and detention were not in proportion to disadvantages suffered by the carriers and said that it considered detention costs for a particularly long period to be exaggerated. It also found against a shipping line in a second case. With forwarders increasingly going to court with these charges and speaking up, the Federal Maritime Commission (FMC) in the US launched an investigation and recently released a report validating the concerns over demurrage and detention. While the organisation has yet to issue any rules on the matter, it is expected that any moves made by the FMC will in all probability be followed by governments elsewhere. According to Roemer. Fiata has stated its position on demurrage and detention in its recently launched Best Practice guide where it calls for an extension of the free period in cases where the terminal is unable to release or receive a container as well as limit the demurrage or detention accrued to a maximum amount.
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$50 The figure at which demurrage charges begin.
