Nobody likes a fee. Whether a parking ticket or a delivery charge with dinner, an unexpected expense can be an unpleasant hiccup in anyone's day. But while the $5 charge to get your Pad Thai delivered to your doorstep might seem inconvenient, fees get a bit more high-stakes in the ocean shipping industry.
As those in the ocean shipping industry continue to tighten their belts, port charges are gaining new importance. Port charges like demurrage, detention charges, and per diem often prove to be an unexpected strain on already strained transportation budgets, forcing shippers to make difficult decisions.
For shippers looking to fight back against rising port fees, we’ve compiled three tech-forward, innovative ocean container tracking software strategies to navigate port charges for containers while improving visibility, efficiency, and communication throughout ocean transportation operations.
What’s Behind the Spike in Port Fees?
During the COVID-19 Pandemic, all players in the ocean transportation industry saw unprecedented volume spikes. Consumers, stuck at home, turned to e-commerce to get vital supplies (and, maybe, not-so-vital things — remember that exercise bike?). Regardless of what was being ordered, massive volume spikes caused jaw-dropping slowdowns at ports, with port operators desperate to make space for more containers. In hopes of encouraging shippers to move containers quickly, port operators and carriers increased port charges as a direct encouragement.
Since the pandemic, however, things have changed, even if port fees haven’t: double-digit volume drops across the transportation industry have seen shippers forced to leave surplus containers at the port, and low demand has carriers intent on bolstering profit margins in a down industry. These high highs and low lows have led to previously unthinkable increases in port charges, with the most significant port charge increases focused on demurrage and detention charges.
According to reporting from Global Trade, the global average increase of demurrage and detention charges was a staggering 39% for standard containers. And it’s not just a few ports seeing higher demurrage shipping charges, either: for 20 major distribution centers, port fees doubled in 2021. “the global average increase was 39% for standard containers, whereas the charges for 20 distribution centers doubled in 2021. While the data picture from 2022 isn’t yet entirely clear, it’s clear that the past year offered only slight relief from rising charges, with major ports like Long Beach, Los Angeles, and Shanghai still seeing 12% increases over pre-pandemic port charges.
Despite recent efforts by regulatory agencies to force carriers to lower what they see as exorbitant fees, it remains unclear how well these initiatives will work. Many shippers criticize regulators for going too far or not going far enough. While regulators and carriers duke it out, it’s up to shippers to fight back against the rising port fees breaking their bottom line.
Fight Back Against Rising Port Fees: Three Strategies
Shippers looking to fight back against rising port charges are looking at innovative strategies to navigate rising fees. By improving visibility, communication, and efficiency in their ocean container operations, shippers are taking advantage of the latest in ocean transportation technology to avoid port charges for containers and optimize ocean container shipping operations.
Streamlined Container Tracking
With 25% of all containers set to be fully tracked by 2026, it’s clear that comprehensive container tracking is quickly becoming the norm in the ocean transportation industry. As port charges rise, shippers throughout the transportation industry are turning to container tracking to maintain visibility over high-stakes ocean container operations. Ocean container tracking gives shippers real-time access to the most relevant, complete, and standardized data. This allows them to see slow-downs coming and collaborate with transportation partners to avoid hefty port charges.
Automated Exception Alerts
The ocean container industry never sleeps. With container movement happening around the clock, shippers must maintain 24/7 visibility over high-stakes ocean container operations. With fully-customizable automated exception alerts, shippers can ensure they stay in the know with each step of the container transportation process and receive instant notifications for rolled cargo, blank sailing, vessel delays, demurrage and detention, and last free day.
While there’s no doubt that automated exception alerts and container tracking are invaluable tools to avoid rising port charges, today’s shippers understand that innovation is only as useful as it is accessible. With API integration, shippers can easily integrate the latest advances in ocean container tracking and visibility into their existing tech stack.
With Port Charges on the Rise, Shippers Turn to OpenTrack
As ocean transportation professionals attempt to navigate a difficult period for the global transportation industry, shippers are under more pressure than ever to bolster the bottom line. With ocean container tracking from OpenTrack, shippers can gain the visibility, communication, and efficiency they need to avoid costly port charges, like freight demurrage, while optimizing ocean container operations.
- Real-Time Container Tracking gives shippers unparalleled insight into container location and ETA.
- Automated Exception Notifications keep shippers up-to-date with high-stakes container shipments.
- API Integration ensures that shippers can access the latest in ocean freight visibility through a single streamlined platform.