Meaning
Commercial fees charged by shipping lines and terminal operators penalize the delayed return of empty containers or the late pick up of imported goods. In the polymer supply chain, port detention demurrage costs can accumulate rapidly when raw resin shipments or molding machinery are held up at the terminal. Demurrage applies to the time the container sits inside the port, while detention applies to the time the container is held outside the port after pick up.
These charges can turn a profitable molding project into a financial loss if customs clearance is delayed.
Supply Chain Impact
When raw material delivery is delayed, the molding plant may run out of resin, which forces a shutdown of injection molding lines. This delay can lead to missed delivery deadlines for the molders’ customers and trigger contract penalties. The combined cost of line downtime and terminal fees can be severe.
Mitigation Strategy
Pre clearing shipments through customs and utilizing reliable freight forwarders can minimize the risk of terminal delays. Some companies negotiate longer free time periods with shipping lines for high volume contracts. This provides a buffer when shipping schedules fluctuate.
Financial Consequence
Unplanned terminal fees must be accounted for in the total cost of goods sold. When these expenses arise, they directly reduce the project’s profit margin because they cannot easily be passed on to the customer. This makes efficient logistics planning essential for polymer importing.