Benchmark report on demurrage and detention: top 5 most expensive ports in the world all in the US
Demurrage and detention (D&D) charges imposed on US shippers by containerlines continue to be the highest in the world and have increased this year even as global average fees have fallen from the record highs of 2021, according to Container xChange.
The company’s Demurrage & Detention Benchmark 2022 report, published on July 5, ranks 60 global ports based on the D&D charges levied by containerlines on customers two weeks after their cargo arrives at the port or is discharged from a vessel.
Even as US regulators are taking a keen interest in container line behaviour due to historically high shipping costs, US ports occupy the top five spots on the list. New York leads the way, followed by the ports of Long Beach, Los Angeles, Oakland and Savannah. All five of these ports are more than two to three times more expensive than seventh-place Hong Kong and at least 20 times more expensive than other major Asian container hubs such as Dalian in China and Busan in Korea.
US importers have been “outraged,” said Christian Roeloffs, co-founder of Container xChange, “by what many believe has been profiteering on D&D charges by container lines. Some have started legal actions against carriers.
“This really came into the cross hairs of President Joe Biden this year when he has been highly critical of container lines. His administration addressed D&D in the Ocean Shipping Reform Act and we’re now waiting to see how this will be implemented and whether it will change shipper or carrier behaviour significantly.”
Container xChange’s report notes that global average D&D charges levied by container lines for standard-sized containers increased from $586 in 2020 to $868 in 2021.
So far in 2022, average charges at major global ports have declined by 26%, to $664 per container, although fees are still higher than before the pandemic.
Of the leading container lines, COSCO currently has the lowest D&D charges and HMM the highest.
To compile the report, Container xChange collected more than 20,000 data points from publicly available sources. These were used to compare D&D rates imposed on customers by the world’s eight largest shipping lines across 60 container ports. The data was then compared with data collected by the company mid-year in 2021 and 2020.
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It’s no different in the Tanker industry, US ports remain arguably the worst performers, aging Terminal infrastructure, deteriorating roads, lack of truckers and a dismal rail network that no one dares to question…. just like the Container Lines, the problem is blamed on the Ocean carriers who are least at fault.
This could be a very misguided report. The percentage of imports going into the Far East ports are far less than what is seen in the US ports. Since demurrage largely revolves around import traffic this could be a large contributor to the reason for the discrepancy.