Average Rates for Detention & Demurrage Fees in 2022 for Yard Management

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October 3, 2022

an image of the yard filled with semi trailers using YardView yard management software

It’s not far-fetched to assume that a yard management system can eliminate charges from third party carriers, such as detention and demurrage fees, but after implementing a robust YMS solution, there is also along-term benefit associated with it since it can go a long way with avoiding many of these unwanted expenses. Let’s discuss the average rates for detention and demurrage fees in yard management today, and how implementing yard management software can reduce costs like these and save you money.

What are Demurrage and Detention Fees?

An image of showing the definitions of Demurrage and Detention Fees on top of a truck driver checking on his cargo

A Demurrage Fee is applied to cargo that has overstayed its time at a specific terminal or gate in your operations yard. Depending on the vendor, terminal, or warehouse, the amount of the demurrage fee can vary.

A Detention Fee or “Detention Charge” or “Per-DiemCharges” are used interchangeably. These fees are applied when cargo or inventory remains in the same pickup or delivery holding place for too long based on the carrier. This can be caused by backlog, a mechanical malfunction, or time tracking related issue.

What are the Costs of Detention and Demurrage Expenses?

Ever since 2020, the shipping industry has been navigating down a rocky road. Detention and Demurrage fees have continued to increase at an unparalleled level. After witnessing the average fee going up by 104% in as little as two weeks across the world’s largest 20 ports, it’s important to note what can be implemented to prevent these expenses from rising higher. Though these third-party charges vary across every yard, the average Detention fee you may come across ranges between $50 to $250+, with the average Demurrage fee you may come across ranges between $75 to $150 per day per container. These expenses remain outside allotted times, so if additional charges and fees were to increase when equipment is not able to be moved outside of pre-determined times.

Savings After Implementing a Yard Management Software Can Vary

In 2020, a global chemical company implemented a YMS System which allowed them to cut millions of dollars in Detention andDemurrage fees. Finding the right YMS solution affects the dollar amount you can save in Detention and Demurrage fees. That chemical plant investigated around 10 different yard management systems before selecting a provider and their decision ultimately cut Detention and Demurrage fees by $1.5 million. While the average return-on-investment (ROI) may vary when utilizing a yard management system, there are recorded cost reductions up to 40% to 80% for Detention expenses and roughly $4,000 monthly in Demurrage and Detention costs.

Let Our Yard Management System Reduce Costs for You

An image of a third party logistics employee operating Yardview Yard Management Software on their office desktop computer

Let’s break it down. While the initial upfront costs might be on the hefty side for implementing a full-scale YMS software to optimize your yard management, the long-term benefits will be reflected on your overall return on investment (ROI). With costs continuing to rise, it’s critical to get in front of it now so you can get the most out of your investment. With more than 20 years of industry experience, our Yard Management System boosts real-time visibility and availability at dock doors, monitors the status and dwell at dock doors, and provides detailed metrics and analytics for usage, turns, and efficiencies across every aspect of the yard. Our team of leading experts crafted an innovative yard management solution that solves real yard management problems and optimizes the business inside and out.Implementing our YMS software will significantly reduce lot check and turn times, increases visibility, enhances tracking, driver management, gate management, dock management, as well as reduces detention and demurrage expenses. Additionally, our team of technicians are based in the United States and go above and beyond when it comes to delivering an exceptional response and turnaround time. By offering 24/7 support, our trained experts will answer the phone when you call and are equipped to address and solve problems quickly. We understand the daily challenges you face, so we created a system that takes your operations to the next level. Are you ready to take the next step in your operations? Schedule a demo of our software today by visiting https://www.yardview.com/demo-the-software.