Shipping Delays Cost You a Fortune in Penalties

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Shipping delays are a common occurrence in the shipping line of work with most factors being outside your control. With proper precautions, you can keep these delays from costing you a fortune in shipping costs.

A growing population and thriving economy create a high demand for goods and services. The spiking demand translates to a thriving business for people in the shipping sector. However, with many players joining the fray, the competition is cutthroat, and this could eat into your bottom lines.

Therefore, it’s in your best interest to find credible ways to keep your overheads under control and protect your profit margins. Signing up for demurrage insurance is an incredible way to avoid the costly surcharges that come with shipping delays. Demurrage charges can often run up to $100 a day for a single container, costing you a fortune in the process.

Guard against the unexpected

Shipping across international lines is a lucrative line of work, but it is often subject to lots of controversies. A diplomatic tiff between neighbouring countries can leave you in a precarious situation. One such incident that stands out happened when Saudi Arabia, Egypt, Bahrain, and the United Arab Emirates cut diplomatic ties with Qatar. The incident meant that the vessels moving cargo to and from Qatar had trouble completing their voyages. The thriving import trade that happened between Qatar and the neigbouring gulf states died overnight. Shipping companies that used Dubai as a transhipment hub en-route to Qatar were now saddled with cargo that couldn’t be shipped out. Vessels with cargo loaded in Qatar were unable to bunker at UAE’s Fujairah, which is the biggest fuelling hub in the gulf. The delays and inconveniences that resulted from the incidents result in losses amounting to tens of millions of dollars. Without proper insurance coverage, such damages can take your business to the brink of bankruptcy.

Guard against recurrent delays

person receiving a packagePort delays and congestion are a common occurrence that can lead you to lose a considerable amount of money. There’s a biting chassis shortage after shipping companies have opted out of that line of business. The deficit could leave your cargo stranded at the port, racking up demurral charges.

Shippers are always at the mercy of Mother Nature, and there’s little anyone can do about inclement weather. Sometimes the prevailing weather conditions can often drive ports to shut down for days. Such delays can see you use up all your free days and start racking up charges. If the roads are equally affected, your cargo can spend more days at the port, accruing more charges. The docking of mammoth vessels at the port can cause delays and congestion. Such vessels have a load capacity of about 14,000 containers, whereas a large ship carries between 8,000 and 10,000 containers.

Successful shippers find creative ways to lower their overhead costs without compromising on service delivery. Keeping the operational costs lets them keep their prices low and affordable, which is a major hit with their customers. You will have a hard time beating the competition if you don’t find ways to avoid expensive surcharges. Such penalties are caused by delays in the shipping lines, often by factors that are beyond your control.

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