Trucking

Break bulk shipper cargo feeling a pinch due to increased detention charges

Breakbulk detention rates are currently running at $ 30,000 to $ 50,000 per day, as opposed to $ 8,000 to $ 12,000 per day before the COVID-19 pandemic. Photo courtesy of: Hari Mahidhar / Shutterstock.com.

Project and breakbulk shippers are experiencing a whole new level of distress regarding detention and detention charges from multipurpose (MPV) carriers.

On the breakbulk side, it is usually the shipper who names the port to be called. For container shipping, it is the carrier who chooses the port because it has a fixed schedule. This difference between the two segments leads to different approaches to detention and demurrage.

For container shippers, demurrage is a fee assessed by the carrier or terminal operator for boxes that have not been moved from the terminal within a pre-specified number of days and to containers that have not been returned in a timely manner. Demurrage will be charged for that. However, if the box is left on board longer than usual due to port congestion or other delays, the shipper will not be charged for that time.

In contrast, in the MPV segment, “detention” and “detention” are used as synonyms for a proportionally distributed fee paid by the shipper to the shipowner or operator for certain types of delays in loading and unloading cargo. Points to.

According to Kaivon Taube, Global Charter Head of the project forwarder deugro, detention of demanding MPV vessels has ranged from a relatively modest $ 8,000 to $ 12,000 per day before the COVID-19 pandemic to now 30,000 per day. It has jumped from $ to $ 50,000. In other words, the two-week delay due to congestion could cost the shipper of the project $ 420,000 to $ 700,000 in detention, in addition to the already raised fares, Fontaube said at JOC.com. Told to...

Breakbulk detention depends on the terms agreed upon at the time of booking, Fontaube said. Fees are generally calculated according to the ship’s Factual Statement (SOF), a time-series log of all events related to its unloading, and evaluated proportionally based on the time lost at the port for a particular cargo. .. This could be due, for example, the time spent berthing, or the delay caused by not being ready to load the cargo or the incomplete documentation.

“Details may vary from carrier to carrier and from client to client. [may] Also consider the actual loading and unloading ports, as well as the goods and other details, “explains Fontaube.

During the slump in the MPV market from 2009 to early 2020, airlines demanded detention fees that reflected much lower daily ship operating costs. The career was happy with this. [they were] Operate their ships with daily losses, “said Fontaube. “Payment of detention has confirmed that we have not lost money during detention for at least a few days.”

Today, container cargo is competing for space with traditional break bulk, and MPV operators have more cargo than they can carry, especially in major trading lanes outside Asia. As such, carriers are demanding detention fees that reflect the daily income that may be lost when the ship is moored at the port, in addition to covering much higher daily charter and fuel costs. increase.

According to von Taube, this allows the carrier to tell the shipper: [loaded] Another cargo from a less crowded port.Therefore, you have to compensate me not only for my actual daily expenses, but also for the profits I have made. [would lose].. “

Contact Janet Nodar janet.nodar@ihsmarkit.com Follow her on Twitter: @janet_nodar..

https://www.joc.com/breakbulk/breakbulk-shippers-feeling-pinch-increased-detention-charges_20220613.html Break bulk shipper cargo feeling a pinch due to increased detention charges

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