Ports & Terminals Material Handling: How to Avoid Demurrage Charges
Our domestic and global economies depend on international trade. A large part of that trade involves industrial ports and terminals through which barges and ships transport tons of materials through handling systems with many moving components.
As the shipped product is loaded, unloaded, and conveyed, fugitive material can become a common concern at the port and terminal facilities. In addition to the problems of downtime, lost product, personal safety, and environmental hazards, spillage and dust can result in mounting charges caused by delays.
A chartered ship transporting bulk material will have a contract stating the time it must load or unload its cargo, referred to as the free period. If the ship does not load or unload in time, it may owe demurrage, which is a charge paid for using the material container beyond the free period.
Demurrage charges are levied by the shipping company or vessel owner against the shipper, who is responsible for paying them. The charges are given because of the other costs and delays that often accompany an interruption, such as trucks that must leave late because the cargo was loaded late. The free period and the demurrage costs can vary depending on the country and the carrier.
Demurrage may involve either the import or export of bulk material. In the case of an import, a container is not moved out of the terminal to be unloaded within the free period. As a result, the shipping line cannot load the container on the ship in time for export.
Another possible fine imposed by a shipping line can be detention charges (per-diem fees). Detention differs from demurrage in that it involves a container outside the port. With an import, detention is charged when a container kept outside a port or terminal for unloading is returned beyond the free period. An export generates charges when an empty container is picked up for loading and returned beyond the free period.
In addition, the port might assess storage charges for containers that have not been moved out of the port within a specified free time. The charges can be assessed for full containers that have not been cleared for import, full containers waiting to be shipped, and empty containers stacked within the port. The storage cost is often passed to the shipping line by the port operator.
A typical demurrage fee might be up to $150 per container per day, and the daily rate can rise as the cargo remains at the port or terminal. The average detention charge can range from $50 to $100 per container per day.
Multiple containers are often shipped at the same time, and a loading or unloading problem might keep them parked for several days or longer. If the situation is not handled promptly, resulting charges can become exorbitant, particularly as global supply chains struggle with being slowed and congested.
What Causes Demurrage Charges, and How Can I Avoid Them?
Demurrage charges and other fines can result from different factors. One can be a shortage of transportation resources, which has been a consequence of the COVID-19 pandemic. Bad weather might also delay the loading or unloading of shipments. In other cases, a shipment may have trouble clearing customs because of incomplete documentation.
Demurrage can often result from bulk material handling problems at the port or terminal. In particular, as bulk material is loaded or unloaded using long conveyor belts, dust and spillage can become a recurring operational issue. If a conveying system requires downtime for correction and maintenance, shipment containers can exceed their free period and generate charges.
In addition to constant, consistent movement and speed, bulk material handling at ports and terminals requires a safe, efficient, and environmentally-friendly system for different types of materials.
The system should be evaluated and designed by engineers who can provide specialized consultation for load calculation, structural analysis, and material-transfer optimization. The engineers also will consider customized solutions for the complete material path from loading or unloading.
When properly designed, installed, and maintained, the system should prevent load zone spillage and dust by up to 90% with integral components such as:
- a transfer chute with consistent center loading and an optimal transfer point design
- a durable skirtboard and wearliner system
- belt support and alignment, including rollers, idlers, and an impact bed
- rubber skirting to prevent dust leakage along the sides of the conveyor
- dust curtains to disrupt airflow streams and dust escaping
- a wash box with high-pressure nozzles and secondary scrapers on the conveyor belt’s return side for keeping it clean with little to no carryback
The bulk material handling system with total dust management at ports and terminals will safely and efficiently move products, whether ore, minerals, salt, grain, or fertilizer. The bulk material will load and unload properly, strictly limit spillage and dust, and require minimal cleaning and maintenance. In doing so, the transfer and delivery of bulk material will help avoid demurrage charges and the other hazards and costs of a system without proper design for production and containment.
Benetech: Your Ally in Bulk Material Handling
To keep up with global and domestic demand, bulk material handling involves shipping must avoid costly and unnecessary complications at ports and terminals. If your business requires bulk material shipping and you would like to find out more about our solutions for ports and terminals, contact us at (630) 844-1300 to speak with a specialist.