The International Federation of Freight Forwarders Association's (FIATA) Multimodal Transport Institute Working Group Sea has released its first best practice guide focusing on the charging of demurrage and detention.
The guide provides best practices that may help reduce unnecessary supply chain costs and inefficient operations leading to unnecessary detention and demurrage charges.
FIATA acknowledges that demurrage and detention charges are a valid and important tool for shipping lines to ensure that their equipment is being returned as fast as possible and users exceeding the contractual duration of use should be charged accordingly.
However, the trade association says that merchants should not be subjected to unjust and unreasonable charges.
In this context, there are strong indications that shipping lines abuse the charging of demurrage and detention to maximise profits.
It is understood that shipping lines have been suffering in a very tough business environment and do everything they can to develop revenue streams that are not necessarily derived from freight.
FIATA does not believe that forwarders and shippers should be subjected to predatory pricing of this nature, especially as delays often occur through no fault of the forwarder/shipper.
FIATA hopes the guide can provide orientation to its members and all stakeholders as to which conditions are adequate. The association also looks forward to closer collaboration with shipping lines and the various stakeholders throughout the port supply chain.
Access to the newly published guide can be found at the following link: https://fiata.com/media/documents-for-download.html