Growth

How to reduce D&D costs for effective supply chain management

08 June 2022
Demurrage and detention Supply Chain Management
Two men of Indian origin high-fiving and smiling

The pandemic-induced lockdown, dynamic geopolitics and economic conditions have led to shipping delays and port congestion, leading to an escalation of Demurrage & Detention costs for importers.

Demurrage relates to cargo, which is still in the container, while detention refers to the equipment (the actual box) that is empty after unpacking or before packing. As per the research, Demurrage & Detention charges varied by $190 per TEU on average across the 20 biggest global container ports. Costs usually arise due to several reasons including transactional errors, late document submission, lack of knowledge and illegal practices.

For those importers who have a geographically spread supply chain, these Demurrage & Detention (D&D) costs can be staggering. But technology could help minimize D&D charges. Here is how:

Supply chain optimisation

Provide visibility into your supply chain

Visibility is key to reducing costs. From knowing where your container is during transit to monitoring progress end-to-end, visibility can help plan better, therefore avoiding certain charges.
Simple claim process

Automate processes to reduce human error

Often, human caused errors can creep in when making a booking, cascading further complications down the supply chain. Going digital and getting rid or reduce manual processes can greatly help avoiding this.
Document

Have the right documents

When an end-to-end logistics provider is chosen as a partner, documentation is handled from them from the point of origin to the final delivery. This will help expedite clearance at ports and customs and address issues such as incorrect or absence of important documents for Demurrage & Detention (D&D).
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Maintain clear lines of communication with all key stakeholders

Responsibilities for each entity and clear communications about expectations should be defined. This will help with documentation required at each stage and any change in delivery for Demurrage & Detention (D&D).
back up team

Keep backup transport in place

Choosing an end-to-end partner that is transport-agnostic can quickly provide the right intermodal transport for delivery, avoiding issues if they arise.
Cycle process

Be prepared for exigencies

Technology can help track the progress of cargo in case of any late release of cargo from destination due to bad weather or irregularities.
Visibility partner performance

Partner with a global logistics player

When you engage with vendors who don’t have a global presence everything from complying with local regulations to logistics management can become an issue. Hence, having a technology-backed logistics partner with a team of global experts and a worldwide presence can help you take advantage of having a geographically diverse supply chain.

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