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Demurrage, detention charges increased 12pc worldwide

Author:   Posttime:2022-08-04

CONTAINERS are piling up at warehouses as demand falls, resulting in rising demurrage and detention charges, contributing substantially to the operational costs for shippers, reports the American Journal of Transportation.

These were among the conclusions reached at a webinar hosted by Hamburg's Container xChange, drawing comments from Drewry and S&P Global among others on the impact of charges on shippers worldwide.
The annual Demurrage and Detention benchmark report showed that there was a major spike in D&D charges in 2021, the global average increase was 39 per cent for standard containers whereas the charges for 20 distribution centres doubled in 2021.
Said George Griffiths, editor, Global Container Freight, S&P Global Commodity Insights: "The shipping industry is going to see the freight rates stay flat for the rest of the year; however, it could see a little variance but might not fall off the cliff to the extent that we saw it rise when it did in 2020 and 2021."
Said Chantal McRoberts, head of Advisory, Drewry Supply Chain Advisors: "There is massive inventory levels that have been building up, if you speak to shippers, they've got a lot in their warehouse that they need to move, and demand is falling."
Said Mr Griffiths" "I firmly believe if nobody wants to ship anything in a container in the next six months, we still wouldn't fix the issues that we've got in the market at this point. The market is really snarled up, and it's going to take a lot of effort to fix it."
Even if the demand eases towards normal standards and the vessels on blank sailings are used to clear up the disruption, ironing out the market issues at hand are going to be towering.
Said Container xChange CEO Christian Roeloffs: "We've always compared the flow of containers situation to a traffic jam. If there's an accident and a traffic jam, even if the accident is cleared up it still takes a very, very long time for traffic to flow again; it's not the case that you just resolve the blockage and then everything flows."
Pandemic-induced container imbalance adds to soaring D&D charges and freight rates; D&D charges remain at a 12 per cent high despite a fall in 2022.
 

 

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