FIATA International Federation of Freight Forwarders Associations is urging shipping lines to review and reinstate the current free time periods back to no less than feasible, pre-pandemic levels.
In a statement, FIATA said while the decision to reduce the free time periods was one-sided, market conditions have, in the meantime, changed, and justifications for the status quo no longer remain valid.
It added that demurrage and detention charges are important tools for supply chain stakeholders to ensure the efficient use of their container stock which represents a substantial investment.
FIATA noted that understanding the need to maintain the velocity of cargo, containers need to be turned around as fast as possible.
Consequently, merchants who use containers for longer periods should be discouraged from this practice.
FIATA notes that it is the obligation of shipping lines to provide a reasonable free period to allow the merchant sufficient time for the loading and delivery of the container for an export; and the pick-up, unloading and return of the empty container for an import.
"During the last few years, free time periods for containers have been reduced, and tariffs for demurrage and detention have increased considerably. Shipping lines justified shorter free time periods noting that it will increase fluidity and help to ease congestion," FIATA said.
It added that the decision "forced merchants" to make considerable efforts to meet free time windows, leading to landside congestion and, above all, traffic jams around major ports and terminals.
"However, merchants have been charged detention and demurrage fees even in situations where they had no control over the container turnaround time, despite their best efforts, due to congestion at ports," the non-governmental organization representing freight forwarders worldwide added.
Congestion issues eased "substantially"
"With reduced volumes shipped, the strain on supply chain bottlenecks came down, and congestion has since eased substantially. The idle capacity of containers that were stuck in congestion are now also coming back into circulation," FIATA said.
The freight forwarders association then called for a "timely response" to adapt to the changed market environment — noting that the supply chain is stronger when there is dialogue and coordination between stakeholders.
"No one stakeholder should impose onerous requirements on the others," FIATA said.
"FIATA calls for detention and demurrage practices to be in line with the velocity principle, with multi-stakeholder coordination to respond to market needs in a timely manner to strengthen supply chain resilience. Now is the time to act to optimise container movements and improve container quality for future use," it added.
