Multiple ocean carriers have recently informed their customers that 2020 is going to bring a lot of changes, and the most significant change is going to be the increase in demurrage and detention penalties, some of which run from $10 per day to nearly $100 per day, including a new $75 fee per container for a customs inspection.
Hapag-Lloyd detention and demurrage fees are rising (active Jan. 7, 2020)
Hapag-Lloyd is scheduled to increase detention and demurrage fees starting Jan. 7. Any temperature-controlled containers are going to see an increase for demurrage fees by a factor of $50, bringing the total charge to $350 per day after the first two working days for any goods on the West Coast. Goods that are coming out of Savannah, Georgia and Houston will see an increase of $25 to a total of $375 per day after the first two working days.
Dry goods are not immune. The demurrage for dry boxes is not going to change at the ports as those changes are still coming. They are scheduled to go up to $10 to a total of $130 per day after the first two working days for any inland rail yards or inland ports.
They state that detention fees are not going to increase exports or imports. However, there will be a new layer of penalties put forth if a shipper is over 14 days late returning any equipment, so be advised that tardiness will equal monetary penalties. This carrier has confirmed that the changes will go into effect immediately, but they did not offer context behind their decision.
APL set to start charging for customs holds (active Jan. 1, 2020)
Starting the New Year, APL is scheduling a new charge for customs holds for shippers. This company is also adding a late fee of $75 per container for Customs inspections. This is going to apply to any inspection done by the US Customs Service, Environmental Protection Agency, U.S. Coast Guard, or US Department of Agriculture. Earlier this month, notification was sent to shippers to inform them that this extra fee would go into effect in 2020. It does hurt importers in particular who need to undergo an entire USDA inspection. Still, the company claims, like other companies, that this is done to offset the costs they endure and that it’s not a profit-making tool.
ZIM is raising demurrage fees
ZIM Integrated Shipping Services is also following suit by increasing its demurrage fees in multiple locations, including the ports of New York and New Jersey; Jacksonville, Florida; Baltimore, Maryland; and Mobile, Alabama.
They have set up their fees based on a tiered structure. The first level of penalties for demurrage fees has increased $50, bringing the total to $285 per day. After that, you get bumped up to the second tier, where if you haven’t retrieved your container, you can face an increase of $90, bringing a total of $380 in fees every day. This company has announced, however, that they’re not going to invoice the carrier, but instead invoice beneficial cargo owners.
The company has stated that these changes will go very far toward the standardization of demurrage billing practices, which until recently vary from one port to another. In some respects this makes it easier for beneficial cargo owners to budget accordingly.
ZIM stated that the majority of ports in which they operate have storage fees and demurrage charges that vary and are subject to separate invoice and collection procedures. By standardizing this, the company can simplify the billing process for every customer no matter what terminal they are using. The company also claims that while fees are increasing, the increase is not substantial. For example, a $10 increase is going to be put into effect for the first level of demurrage on any dry containers and refrigerated containers in New York and New Jersey. Realistically this total amount is still a small percentage.
How Shippers Should Prepare
Many of these higher penalties are kicking in after a few days, so shippers need to prepare by making timely decisions in their business practices, maybe setting aside more budget for these potential fees based on how many charges they were subject to in the previous year. It’s also vital that shippers keep an eye out for the decision from the Federal Maritime Commission. If the proposed rule goes into effect, shippers can start to lodge complaints on an individual basis.