Detention & demurrage wreaking havoc on nation’s intermodal carriers

A new research report from the Harbor Trucking Association, that represents the nation’s drayage carriers serving America’s West Coast Ports, and TradeLanes, an advanced technology company that is streamlining global commodity trade, shows that the disruptions from unchecked detention and demurrage are wreaking havoc on the country’s intermodal carriers and threatening US exporters, importers, the transportation industry, and the hundreds of thousands of jobs that they support.

In a survey conducted with top local, regional and national trucking organizations, HTA and TradeLanes uncovered that costs and disruption arising from detention & demurrage (D&D) are threatening the nation’s intermodal carriers - with more than half reporting critical negative effects on their business.

• A whopping eighty-nine (89%) of respondents report a highly-negative effect on their overall business from recent D&D; and fifty-six (56%) report a business-critical negative effect.
  
• Sixty-four percent (64%) of respondents report that more than 15% of their containers incurring D&D charges (with 32% incurring charges on more than 20% of their containers). 
  
• Over 80% of respondents are incurring more than $200 D&D charges per container, with 18% seeing average charges of more than $500 of D&D charges per container. 
  
• This does not account for the incredible administrative burden, as auditing and disputing takes 45 minutes or more per invoice on average.
  
• Consistent with other HTA-studies, most respondents are only successful with reprieve 25% of the time. 
  
• “No Appointment Available” is the most commonly-cited reason for dispute.
  
• Eighty percent (80%) of members report that carriers still aren’t leveraging technology to resolve these issues.
  

"Resolving the issues surrounding unreasonable detention and demurrage is the top priority for the Harbor Trucking Association, as voted on by our board of directors,” says Weston LaBar, Chief Executive Officer of HTA. "The process and governance regarding the extortive assessment of detention and demurrage lacks equity, inclusion, and transparency. The cost and disruption imposed by excessive detention and demurrage is threatening the ability of the intermodal transportation industry to survive. Working with US regulators and industry leaders to modernize the Shipping Act and Uniform Intermodal Interchange Agreement to establish a fair and equitable process for American truckers and shippers is our top priority."

HTA applauds the terminal operators who have collaborated in partnership to establish better technology and processes, implementing suggestions to increase operational efficiencies. Still, more work is needed to address this industry-wide issue, starting by modernizing the policies that govern detention and demurrage.

“We have the most advanced technology available to help US exporters manage supply chain disruption profitably, but technology alone cannot resolve the recent problems at the ports,” says Vijay Harrell, CEO of TradeLanes. “We need collective action to restore balance.” 

HTA and TradeLanes are committed to work on joint solutions for the challenges facing the transportation, import, and export industry.