Post Date : July 21, 2022
Container xChange’s new Demurrage & Detention Benchmark 2022 report, published today, compares Demurrage & Detention (D&D) rates imposed on customers by the world’s ten largest shipping lines across 60 of the world’s biggest container ports. According to the report, the D&D charges by major ports so far for 2022 have declined to an average of USD 664 per container i.e. by 26%, although fees remain far higher than pre-pandemic at around 12%.
The D&D charges saw a sharp spike in 2021 vis-a-vis 2020 due to the pandemic. Although in 2022, the charges subsided along with the impact of the pandemic and the impressive recovery efforts, due to the global economic challenges the charges have still not reached their pre-pandemic value.
On bifurcating by region, it notes that the D&D charges, for May, in the US were the highest at USD 2,692 per container. This compared to USD 549 in Europe, USD 482 in India, USD 453 in China and USD 366 in the ‘Rest of Asia’. If a container was stuck in New York for 14 days, the customer would have to pay the shipping line a D&D charge of USD 3,182. But if it was stuck at Busan, they’d only have to pay USD 114. The difference between these two fines is a whopping USD 3,068.
Throughout this pandemic, as shipping costs have soared and inflation has become a threat to the global economy, it has become critical for shippers to develop visibility into container operations to manage costs like Demurrage and Detention. China leads the world in maritime exports and even though it has some of the busiest ports in the world, they’ve ensured they are the most efficient – even during lockdowns.”Christian Roeloffs, co-founder of Container xChange
According to the report, in 2022 D&D charges are falling in Chinese ports like Hong Kong and Shenzhen but rising in Shanghai and Ningbo. From 2020 to 2021, the pandemic was going on in full force around the world. During this time, the 8 biggest and the busiest Chinese ports experienced a steep rise in their D&D charges. On average, the D&D charges at these 8 Chinese ports rose from $390 in 2020 to $700 in 2021 – a staggering rise of 79.4%. For Hong Kong, where the container congestion was the worst, there was a 105% hike in its D&D charges in the same period.
However, in 2022 the average D&D charges for these 8 ports in China fell to USD 614, declining by 12.2%. Hong Kong recorded a fall of 8.9% in its D&D charges, coming down to USD 1515. The trend reversed slightly, with D&D charges falling in some of the major ports but continuing to increase in Dalian, Ningbo, Qingdao, and Shanghai.
Shanghai, Qingdao and Ningbo in China are 3 of the only 8 ports that increased in D&D charges in 2022. On an average, the D&D charges at these 8 Chinese ports fell from USD 700 in 2021 to USD 614, declining by 12.2% in 2022.
Levying D&D charges serve the purpose of encouraging users to stick to the agreed free days. And return the container to the shipping line as soon as possible. They are also a way to compensate the shipping line for the delay in returning the container.