Drayage 101: Understanding the Various Container Holds and Demurrage Charges

Lindsay B.
Lindsay B.
July 10, 2023

Drayage 101: Understanding the Various Container Holds and Demurrage Charges

Welcome to Drayage 101; our blog series where we breakdown and define the basics of drayage.

When it comes to drayage, it's essential to grasp the different types of container holds and the potential impact they can have on demurrage charges. Properly managing these holds is crucial for efficient operations and cost control. In this blog post, we’re digging a bit deeper into the hidden costs of drayage from our last post as we explain the various container holds encountered in drayage and how they can affect demurrage fees.

Customs Hold: Navigating Compliance to Avoid Demurrage Charges in Drayage

One common type of hold in drayage is the customs hold, imposed by the U.S. Customs and Border Protection. This hold is designed to ensure compliance with American rules and regulations governing the import of containers. When a customs hold is in place, it is crucial for the shipper to promptly investigate and clear it. Failure to do so can result in demurrage charges if the hold extends beyond the last free day, but also unexpected delays if there is a Customs exam and inspection. By proactively checking the terminal website for customs holds and collaborating with the appropriate authorities, you can minimize the risk of delays and associated demurrage fees. Working with a partner like Dray Alliance who integrates directly with the port terminals can streamline this process so you get notifications quickly. Note: customs holds must be cleared by the shipper and cannot be cleared by Dray Alliance.

Freight Hold: Streamlining Payments to Prevent Demurrage in Drayage

Another hold frequently encountered in drayage is the freight hold, imposed by steamship lines. This hold is related to outstanding payment obligations, such as stay fees and examination costs. To avoid incurring demurrage charges, it's essential for the shipper to promptly settle all outstanding costs associated with the freight hold. By closely monitoring the terminal website for any indication of a freight hold and ensuring timely payment, you can facilitate the release of containers and minimize the risk of demurrage fees.

Port of Long Beach

TMF and CTF Hold (PierPass and Clean Truck Fee): Mitigating Demurrage Risks in Drayage

Paying attention to additional charges like the PierPass and Clean Truck fees is vital in drayage to prevent holds and demurrage fees. The PierPass fee is an extra charge assessed for each container passing through the ports of Los Angeles and Long Beach. On the other hand, the Clean Truck fee is part of an environmental initiative to reduce air pollution. Failure to pay these fees can result in holds being placed on containers, leading to potential demurrage charges. To avoid such situations, shippers must promptly settle the PierPass and Clean Truck fees, ensuring smooth container retrieval and minimizing the risk of demurrage.

Closed Area Hold / Unable to Locate: Effective Communication for Demurrage Prevention in Drayage

The Closed Area hold or Unable to Locate hold are imposed by the terminal and can disrupt drayage operations. A Closed Area hold is placed when a container is in a closed or inaccessible area within the terminal yard. This typically occurs due to a planned closure where an operation taking place in the terminal is preventing drivers from getting to the container. Unable to Locate holds are containers that the terminal has lost or that have been buried in the stack. These occur without warning and are discovered when your drayage provider attempts to pick up the containers. To prevent unnecessary demurrage fees, effective communication between the terminal and the shipper is crucial. By promptly notifying shippers about closed area holds and providing updates on the container's availability, terminals can ensure that shippers avoid dry runs and any associated demurrage charges.

Streamlining Drayage Operations with Dray Alliance's Terminal Integrations

Managing container holds and staying on top of fees can be a time-consuming and complex task in drayage. However, with Dray Alliance's innovative terminal integrations, the process becomes significantly simpler and more efficient.

Hold Notifications: With Dray Alliance's terminal integrations, shippers receive notifications about any holds placed on their containers. These notifications are generated and sent directly to the shipper's preferred communication channel, eliminating the need for manual checks on terminal websites. By promptly receiving hold notifications, shippers can take immediate action to investigate and clear holds, minimizing the risk of delays and demurrage charges. Note: Dray Alliance cannot clear custom holds or freight holds, but can clear TMF and CTF Holds if given prior approval by the shipper.

Centralized Fee Tracking: Dray Alliance's platform integrates with terminal systems to provide shippers with a centralized view of all fees associated with their drayage operations. Whether it's customs fees, freight charges, or additional fees like the PierPass and Clean Truck fees, shippers can conveniently track and manage these costs from a single platform. This centralized approach simplifies fee reconciliation, ensuring timely payments and reducing the likelihood of holds being placed on containers due to outstanding fees.

Demurrage Alerts: Demurrage charges can quickly accumulate if containers are not picked up or returned within the designated free time. Dray Alliance's terminal integrations include demurrage alerts, which notify shippers when the last free day is approaching or if containers have already incurred demurrage charges. By proactively monitoring demurrage status, you can take necessary actions to avoid additional fees and optimize your drayage operations.

Efficient Communication Channels: Dray Alliance's platform provides seamless communication channels between shippers, terminals, and drivers. Shippers can easily communicate with terminals to resolve any hold-related issues or to coordinate fee payments. Likewise, your Dray Alliance account manager can promptly notify you about closed area holds or other unforeseen circumstances that may impact container availability. This streamlined communication process reduces confusion, minimizes dry runs, and helps mitigate demurrage risks.

Optimizing drayage operations and mitigating demurrage fees require a proactive approach to managing container holds. Dray Alliance's terminal integrations and account managers empower shippers with the necessary tools and timely information to simplify the process of monitoring holds and fees in drayage. By leveraging these integrations, shippers can enhance operational efficiency, reduce costs, and ensure smoother container movements throughout the drayage process.

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