What is Per Diem Charge?
Also known as ‘detention,’ per diem charge is the fee that the ocean carrier charges for each day past the number of “free” days that the container spends away from the port.
How and why is per diem charge implemented?
Per diem charge is implemented because ocean carriers are often anxious and diligent to get their containers back, which will allow them to stay in circulation. In a way, the per diem charge discourages importers from storing containers for an extended period of time.
What happens if you need to keep storing cargo?
While it is ideal that a container is returned before the end of its ‘free days,’ it is also important to note that importers often need to store their cargo for a longer period of time. If one needs to store cargo for an extended period of time but wants to avoid per diem charges, it is suggested that they unload the container at a warehouse, as storage charges at warehouses are generally cheaper than per diem charges. This way, the load will be stored and the trucker will be able to return the contained back to the carrier on time.
How much are per diem charges?
Per diem charges vary by carrier and port, but they normally range between $50 and $100 per day.
Why is per diem detention charged?
Per Diem charges exist as a way to regulate the circulation of equipment. These charges prompt the quick return of the containers or other equipment back to where they belong/the owner. Without per diem, it would be difficult for container owner companies to have their equipment returned to them. The per diem charge exists to offset losses from those delays, such as costs from the injection of additional equipment into the carrier’s fleet or chassis pool, and to discourage importers from storing containers for long periods of time.
How can I avoid Per Diem charges?
There are a couple of ways in which you can avoid getting Per Diem charges.
- Keep track of the containers or other equipment, once you’ve pulled them from the yard. Make sure you are clear on when they need to be returned to the yard.
- Handle the containers at hand in a first in, first out technique- meaning the oldest inventory items (containers/equipment, in this case) are handled first so that once they’re emptied, they can be returned to the owner/yard.