The nine largest ocean freight carriers collected roughly $13.4 billion in detention and demurrage charges over a three-year period between 2020 and 2023.
Detention and demurrage fees are a profit-draining reality for so many supply chain teams. When your data is stitched together from various sources, error-prone, inefficient processes lead to dwell time oversights and needless (avoidable) container costs.
What's the fix?
In this post, we explore how you can eliminate unnecessary detention and demurrage charges and drive significant cost savings.
How fragmented data undermines container oversight
In traditional inventory management systems, critical data is often fragmented because it comes from internal systems, external providers and in countless formats. Common challenges include:
- Inefficient Container Tracking: Outdated or fragmented information leads to delayed responses to changes in container status. Without precise and timely tracking, containers are at greater risk of incurring detention and demurrage fees.
- Difficulty Assessing Tradeoffs: Without full order visibility, it’s difficult to assess tradeoffs between inventory needs and container costs when prioritizing containers for pickup, delivery, and return.
- Inadequate Planning and Forecasting: The inability to accurately predict container ETAs complicates downstream planning, including staffing and inventory decisions.
- Poor Historical Analysis: Without detailed historical data on container dwell times, assessing the causes of excessive dwell time and improving free time allocation is challenging.
But here’s the good news. All this unnecessary inefficiency caused by data blindspots is completely avoidable.
Data-driven container management drives down costs
Responding to these challenges effectively requires a proactive and data-driven approach.
Supply chain visibility allows your team to monitor risks, resolve issues, plan effectively, and drive continuous improvement.
With a comprehensive view of your supply data, your teams can:
- Improve Container Tracking: With precise container tracking data, you can manage container movements meticulously, identify and prioritize containers dwelling past expected thresholds, and enable key stakeholders to act promptly to avoid unnecessary fees.
- Enhance Network Planning: Accurate ETAs enhance downstream planning, inform tradeoffs between costs and inventory needs, and help ensure timely inventory availability.
- Improve Free Time Allocation: With a granular analysis of active and historical dwell time, you can identify and mitigate the root causes of excess dwell time, like late pickups, refine lead time planning, and improve free time allocation.
- Minimize Contractual Free Time Costs: Using historical dwell time information (by carrier, lane, and route) also allows you to assess free time needs and right-size free time allocation during carrier contract renewals.
So, how do you consolidate all this data without the complex IT burden?
How to eliminate your detention and demurrage fees
At Unity SCM, we help customers manage and eliminate excess container costs. Here’s how we do it.
Our platform integrates and normalizes a wide range of data, from structured and unstructured and internal and external sources. Our team does the integration in just days, so you and your IT team don’t need to.
With an up-to-date, shared view of all your order statuses, your teams can:
- Proactively manage container movements and optimize container use
- Collaboration cross-functionally on exceptions
- Identify shipments at risk of incurring fees early and act promptly to prevent charges.
Our adaptable data platform helps businesses cut their demurrage and detention fees by at least 50% or even completely.
To learn how we can help you reduce detention and demurrage fees in just days and build a more cost-efficient supply chain, contact our team today.
