Tips in avoid demurrage charges ( Airline Shipping Chapter)
Updated: Dec 29, 2019
A demurrage fee by definition is "a charge levied by the shipping line/airline to the importer in cases where they have not taken delivery of the cargo and move it out of the port/terminal area for unpacking within the allowed free days.”
Demurrage is without a doubt one of the most frustrating aspects of working in the trade and transportation field. At times, we may even feel like airlines terminal are intentionally looking for ways to inflate your bill, but that’s not the case. Whenever we get on the phone call with the airline to track shipment status, the first thing we ask is," Which day is the last free day? And how much storage per day after that?" Airline is delayed; Airline staff lost the baggage; cargo is being split into two airlines; fees are not properly paid by the time driver shows up in airline; airline staff entered wrong AMS information etc. Incidents happen. Mistakes happen. There are always drama stories about airline shipping demurrage fees.
The intent behind the fee is understandable – facilities need to clear space as quickly as possible in order to make room for new customers. I have just attended JFK airline panel a week ago and airline handling agent says the same thing. Rents are expensive, labors are expensive, and spaces are extremely limited. JFK handles almost 1.4 million tons of air cargo but the total air cargo area is 1700 acres. it is such a busy hub that they have to enforce 48 hours free allowance period in order to quickly turnover storage space as quickly as possible. Quite handful airline even starts to count Sat& Sun into 48 hours free allowance period. So if you have air shipment arrived on Friday afternoon 5 Pm, you may start to pay the demurrage fee starting Monday!
Nobody likes to pay additional fees, let me share with you some tips to minimize the risk.
Send completed documentation to your broker at least 48 hours before air departure to make sure your broker can pre-clear cargo. Completed document includes commercial invoice, packing list, Master/house airway bill, manifest copy. If your shipment involves FDA , EPA , Wild live& Fish, etc, you will make sure have your broker preview your commercial invoice even earlier in case they need more information.
Avoid the book air shipment schedule during weekends & holidays. More and more airlines start to count weekends into 48 hours free time period as I mentioned above ( Delta is one of them).
Remind your broker/ forwarder to dispatch the work order to their trucker before shipment arrived airport. Most truckers require 24-48 hours to set up driver for their next day schedule. A little time buffer can go a long way in keeping extraneous fees at bay.
Always have Plan B. A contingency plan is always a solid investment when things happen. For whatever reason, your broker's partnered trucking company has difficulty in picking up your cargo, you can help find an alternative driver to pick up. Just remember, whenever you decide to you use your own driver, let your broker issue a delivery order to consignee your trucking company's name.
Communication is IMPORTANT! Constantly keep in contact with your broker, forwarder, and shipper of upcoming shipping schedule and expectation is very important.
Make sure your broker is consigned airway bill so that airlines can alert your broker arrival information. Also, airline staff can only share cargo details with parties being consigned in the airway bill.
6. Avoid shipping heavy or large volume shipments via air. If the airline starts to charge a demurrage fee, it is measured either based on weight or volume whichever is greater. If you ship temperature control goods via air, the demurrage fee is even higher.
Last but not least, working with a responsible and professional freight forwarding & customs broker can be a great help. I hope you all can find the one you trust. ；）