ADDITIONAL OCEAN FREIGHT COSTS DUE TO COVID-19

Dear customers,

 

We are sure it is not news to you that COVID related issues have affected the supply chain and that the associated costs are contributing to the higher retail price of goods leading to rising inflation.

 

As your logistics provider Exfreight and our transportation partners are doing all possible to limit your exposure to these additional costs and providing quotations in good faith that have included premiums charged by our vendors in the supply chain. However, we are seeing drastic shortages in the container drayage sector. The lack of container chassis is well documented and is occasionally preventing drayage companies from honoring booking commitments to collect containers from the ports of entry and destination rail-ramps. Additionally, scheduled drivers are calling in sick due to COVID illness which further limits the drayage providers’ ability to pick up planned containers.

DEMURRAGE, DETENTION and YARD STORAGE are the three greatest challenges we are seeing today. Please click HERE for a detailed explanation of these charges.

The charges are not only being incurred on FCL loads but the consolidators bringing in groupage containers are also having to pass them on prorated to each HBL in their containers.

HOW CAN EXFREIGHT HELP ME?

Exfreight is continually working to limit your exposure to these charges via the following efforts:

  • Clearing cargo through customs prior to vessel arrival whenever possible.
  • Ordering final-mile delivery of your container immediately upon steamship-line receipt of a confirmed ocean booking (generally 3 to 4 weeks prior to scheduled arrival).
  • Internal system-monitoring of our drayage partners confirmation of pending deliveries and dual container tracking until arrival at port.
  • Monitoring of ETA’s during a shipment’s lifecycle due to COVID related delays at origin or destination port.
  • Close follow-up on late container release due to payment delays or late surrender of original bills of lading.
  • Pro-active follow-up on delays due to customs holds.
  • Shipment notification updates once containers are available and drayage dispatches executed to collect, deliver and recover the container.

IMPORTANT TO NOTE:

  • As ETAs and availability shift, so does the original drayage delivery booking.
  • Occasionally, due to circumstances beyond the control of our dray partners or Exfreight, the bookings cannot be fulfilled as planned.
  • Chassis shortages and lack of planned drivers on a given day due to sickness can limit the drayage company’s capacity resulting in last minute cancellations.
  • If a load is cancelled the drayman will reallocate the first available resource to fulfill the pickup but this may result in several days of demurrage charges from the steamship line.
  • Regarding the late return of an empty container, detention charges are assessed by the carrier.
  • As noted above these charges can apply to both LCL and FCL shipments.

 

Unfortunately, these charges must be passed on to the customer. It is not possible for Exfreight to indemnify our customers from COVID related delays.

 

DEMURRAGE: The result of a container not being picked up on or before the Last Free Day (LFD) can lead to additional demurrage costs from the ocean carriers. Ocean carriers give a limited number of free days after arrival at port (this varies by steamship line and can run from 1-4 days or more). If the planed pick up causes a container to dwell at port longer than the LFD (Last Free Day) the steamship line will charge a demurrage fee per day. They fees escalate the longer the container remains at port and are generally $100 per day per container or more.

 

DETENTION: Once a container is removed from the port the clock starts ticking for it’s return. Steamship Lines encourage the speedy return of their empty equipment by charging a detention per diem after the allocated number of free days has expires. Usually 5 days.

 

YARD STORAGE: In order to limit demurrage charges at port Exfreight may be forced to pick-up a container and hold that container within a secure yard awaiting a driver that is able to complete the delivery. This action drastically reduces the per diem demurrage charges. For example, the average daily demurrage charge is $100/day vs Yard storage at $40/day.