Demurrage fees are charged when the unloading of shipping containers exceeds the agreed timeframe, typically around three days after discharge. These fees are calculated per cubic metre for each day beyond the initial grace period, leading to rapidly increasing costs, particularly for large shipments awaiting movement.
According to a recent BBC report* attacks in the Red Sea have reduced global shipping capacity, leading to a sharp increase in container prices with the current price for immediate delivery of goods increasing by almost 70%. Consequently, retailers are rushing to order their Christmas stock early, creating a new set of challenges. The surge in early deliveries exacerbates port congestion. As more containers occupy space, demurrage and dry dock storage fees are escalating.
Supply chain specialists Visku, have an innovative solution to help mitigate the costly problem of demurrage fees.
The Impact of Demurrage Fees
This challenge is particularly severe for smaller suppliers, whose business models rely on minimal overheads.
These suppliers often move goods directly from port to retailer, avoiding warehousing to keep costs low and stay competitive. If a retailer delays shipment arrival due to excess seasonal stock, for example, suppliers face a race against time to find a solution or risk devastating demurrage charges. At best, these fees erode profit margins; at worst, they threaten business viability.
The Quick and Easy Solution to Demurrage
Visku’s Pallet Hotel offers a timely and efficient solution for businesses facing demurrage charges. This on-demand warehousing service, available across the UK, allows customers to self-serve by searching for desired storage locations and booking as much space as needed. With no minimum commitment terms, users only pay for the time they use the space, providing maximum flexibility.
Benefits of Pallet Hotel
The Pallet Hotel provides five million square feet of storage space across the country, catering to all sorts of specialised requirements and solving storage problems.
- Proximity and Flexibility
Visku’s network includes over 200 warehouses, allowing goods to be stored much closer to their final destination rather than off-dock storage near a port. This proximity enables quick transportation if retailers suddenly accept the stock, and offers flexibility for extended storage if there are delays. Suppliers can also access and process their goods as needed, enabling quality control checks and personalisation of items, such as adding logos or monograms.
Pallet Hotel offers devanning, palletisation, sorting, and wrapping services, ensuring goods are properly prepared for storage regardless of how they arrive. This helps avoid detention charges and allows for partial deliveries when retailers can only take some of the stock.
- Cost-Effective Reliable Storage
With a fixed price per pallet for the entire year, Pallet Hotel can be included in contingency planning to de-risk importing operations. This reliable fallback allows suppliers, especially independent ones, to confidently enter large retail contracts knowing they can manage delayed delivery requests.
