Global demurrage and detention charges at the world’s top 20 container ports are now up 104% compared to a year earlier
The ten leading Chinese ports have seen a 126% year-on-year increase in average D&D charges
Shippers at the Port of Long Beach now face D&D fees of $2,638 (two weeks after discharge) on average, the highest in the world
At the bottom of the spectrum is Busan in South Korea with average D&D charges of only $132 in March this year
Demurrage and detention (D&D) charges imposed on shippers by container lines have soared at unprecedented rates globally over the last year, but with large differences in hikes by port and by carrier, according to a new report from Container xChange.
The Demurrage & Detention Benchmark 2021 report found that across the world’s 20 largest container ports, average D&D fees levied by container lines on customers two weeks after a box was discharged from the vessel more than doubled across ports and shipping lines between March 2020 and March 2021, climbing 104% or the equivalent of US$666 per container across all container types.
Demurrage charges always relate to the time a container is inside a terminal. On the other hand, detention is a charge for extended use of the container until it is returned empty to the shipping line.
None of the world’s top 20 ports by throughput saw a decrease in D&D fees over the period, said the paper released by one of the world’s leading online container trading platforms.
On average, D&D charges in March this year were $720 per box across standard container types two weeks after the box was discharged from the vessel.
“Demurrage and detention prices have always been an area of conflict between shippers and carriers and that tension has reached a new level this year as costs have spiralled,” said co-founder of Container xChange Christian Roeloffs.
According to the report, the 10 leading Chinese ports experienced a 126% increase in average D&D charges from March 2020 to March 2021. Qingdao saw the biggest rise in D&D rates, up 194% year-on-year, followed by Dalian where shippers suffered an average increase of 187%.
However, D&D charges in China remain far lower than in many other leading ports with seven of the top 10 cheapest ports located in the country. By contrast, average D&D fees two weeks after discharge at the Port of Long Beach in the US in March were $2,638, the most expensive in the world. In second place was neighboring Los Angeles at $2,593.
“In the US, the Federal Maritime Commission is now looking into the practices of the container shipping industry and searching for ways to ensure that container users, many of whom feel they have been charged unfairly by carriers for D&D, can be refunded,” said Johannes Schlingmeier, CEO & founder of Container xChange.
“Certainly, D&D rates have been accelerating, adding to the burden on shippers and industry on top of record container rates and global container shortages,” he added.
Rotterdam had an average D&D rate in March of $756, Singapore was $615, and Antwerp was $709.
At the bottom of the spectrum was Busan in South Korea with average D&D charges of only $132 in March this year. Next cheapest were the Chinese ports of Dalian and Tianjin, both with averages of $201.
Variations by port, carrier
D&D charges do not just vary by port, they also vary by shipping line within each port. At the port of Los Angeles, which has been central to the chaos evident on the trans-Pacific container trade over the past year, average D&D charges increased by 142.7% from March 2020 to March 2021, noted the report. CMA CGM’s D&D rates increased the most, up 167% over the period. Maersk was a close second, with its customers seeing a 161% increase in D&D charges.
By contrast, COSCO, unlike the other carriers in the Port of Los Angeles, lowered its average D&D fees by 15% over the period, from $1,417 in March last year to 2020 to $1,213 in March 2021.
In Hamburg, Germany, meanwhile, the cheapest carrier in March this year was CMA CGM, which charged $258 in D&D after two weeks. Yang Ming was the most expensive line with rates of $1,612.
Globally, the cheapest combination of carrier and port was COSCO and the Port of Busan in South Korea. The most expensive combination was CMA CGM at the ports of Long Beach and Los Angeles.
Photo by Busan Metropolitan city