Detention and demurrage charges for breakbulk shipping might be getting high, but an owner said its for good reason.
Speaking on a panel on the changing nature of project cargo logistics at the Journal of Commerce’s Breakbulk22 conference, Intermarine president Richard Seeg understood why shippers might be upset with the fees.
“It is [ridiculous], but carriers also have costs we didn’t have five years ago,” he said on Tuesday.
The head of the Louisiana-based owner of multipurpose vessels (MPP) and general cargoships said if his company has to charter in a ship due to too many of its ships being tied up in congested ports, he has to spend $20,000 per day or more versus the $8,000 per day in years past.
Seeg said Intermarine has carried cargo from Asia, Europe and Africa, but always makes sure there is tonnage available, either from its fleet or chartered in, for its primarily Americas-based customer base.
“As far as the detention and demurrage goes, it's not only the cost on that ship,” Seeg said.
“One of the reasons that that demurrage rate tends to be high is because now I have to charter another ship off the market to cover those other ships.”
With sky-high demand for trans-Pacific tonnage pushing container shipping rates to highs, some shippers have turned to MPPs and general cargoships to move either containers themselves or cargo typically moved in containers.
The rise in demand has helped push rates for those ships higher, but injected more uncertainty into the market as MPPs and general cargoships need to call on both breakbulk terminals and container terminals. Ships can also get stuck in congested ports on both sides of the Pacific Rim.
