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Home » Report: U.S. ports are most expensive for detention and demurrage fees

Report: U.S. ports are most expensive for detention and demurrage fees

Container lines tax shippers with high rates, even as global rates recede, Container XChange says.

container xchange Screen Shot 2022-07-05 at 1.00.05 PM.png
July 5, 2022
DC Velocity Staff
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The top five most expensive global ports for detention and demurrage (D&D) fees on cargo containers are all in the U.S., where such charges have increased during 2022 even as global average fees have fallen from their record highs of 2021, according to a report from logistics technology provider Container XChange.

Those most expensive ports are New York, Long Beach, Los Angeles, Oakland, and Savannah, as ranked by the fees imposed on U.S. shippers by container lines, the Hamburg, Germany-based firm said in its “Demurrage & Detention Benchmark 2022” report. And the gap is growing, with all five ports being more than 2-3 times more expensive than Hong Kong in 7th spot, and 20 times more expensive than Dalian in China and Busan in Korea, the report found.

The growth comes despite increased U.S. regulatory scrutiny of such charges, highlighted by the June passage of the Ocean Shipping Reform Act (OSRA), a U.S. law which grants giving federal regulators more power to exert control over maritime carriers.

“Throughout this pandemic as shipping costs have soared and inflation has become a threat to the U.S. economy, the focus on container line behaviour by politicians and regulators has magnified,” Christian Roeloffs, co-founder of Container xChange, said in a release. “U.S. agricultural shippers have been particularly outspoken about their inability to find affordable empty containers for exports. But importers have been equally outraged by what many believe has been profiteering on D&D charges by container lines. Some have started legal actions against carriers.”

By the numbers, global average D&D charges levied by container lines on customers two weeks after a cargo was discharged from the vessel increased in 2021 by 38% for standard-sized containers, from $586 in 2020 to $868. So far in 2022, average D&D charges by major ports have declined 26% to an average of $664 per container, although fees still remain 12% higher than pre-pandemic.

By comparison, the average charges at the port of Long Beach in May 2022 that were levied by container lines on customers two weeks after a box was discharged from the vessel was $2,730 per container, up from $2,638 a year earlier. Likewise, at the port of Los Angeles in May 2022, the average D&D fees were $2,672 per container, up from $2,594 per container in 2021.

Container xChange compiled the statistics by collecting more than 20,000 data points from publicly available sources, and comparing D&D rates imposed on customers by the world’s eighth-largest shipping lines across 60 container ports in the world.

One possible solution for reducing those soaring fees is using shipper-owned containers (SOCs) instead of shipping line/carrier-owned containers (COCs), Johannes Schlingmeier, CEO & founder of Container xChange, said in a release. “Taking the SOC options means you're not leasing a container from the shipping line,” he said. “So, if your container gets held up inside or outside of the terminal, you won't have to pay late fees to them.

Schlingmeier also called for ‘common sense to prevail on D&D fees rather than regulatory intervention.” Better planning by all supply chain partners and better communication between logistics partners and stakeholders can help reduce liability and exposure, he said.
 


Maritime & Ocean Container Terminals
KEYWORDS Container xChange
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