$12MM+ Savings in Demurrage & Detention Charges

Published on
Feb 3, 2023
Written by
Adam Baker
Read time
5 Minutes
Category
Articles

Adam Baker

VP of Customer Experience

$12MM+ Savings in Demurrage & Detention Charges

Like many companies, this (confidential) customer started to realize they were in the dark when it came to what was really going on with their supply chain. They were relying on partners to provide them with data about where their shipping containers were at any given point in time, and to act on their behalf.

What they discovered was that those partners either didn't have the necessary data, or the data they had wasn't accurate. The partners didn't know when containers were ready to be picked up, or when they needed to be returned. This was resulting in millions of dollars per month in demurrage and detention charges.

Because the customer was wasting millions of dollars per month on these demurrage and detention charges, they decided to search for a demurrage management system to help with one of their biggest supply chain visibility problems.

The challenge was how to ensure they would have the best container milestone data possible.

They needed more than just accurate ETAs. They needed accurate data around “Last Free Days” and “Container Availability” for both ocean and rail terminals around the United States. They also wanted to integrate with their warehouses and Yard Management system to get a view of the full container lifecycles.

Even more challenging, how to do that when every carrier and terminal has different terms and rates around demurrage and detention. And in some cases, the company has their own custom contracts. A standard one-size-fits-all solution wasn't going to work for them.

When they asked if Gnosis Freight’s Container Lifecycle Management™ Platform (“CLM Platform”) could help, the answer was, “let's figure it out”.

Working with their Gnosis account management team, their contract specifics were broken out by carrier, lane, terminal, equipment type and other determinants pertinent for accurately calculating each container’s Last Free Day (LFD) on and off port. Gnosis then calculates any fees incurred and accurately attributes them to the exact days they were incurred.

Previously, this process had been internally managed manually and reactively, until Gnosis was able to build this new Demurrage and Detention Alarms™ module into their CLM platform. Immediately the D&D Alarms began to notify the customer of containers at risk of demurrage and detention before the fees were incurred.

Before Gnosis, the logistics team spent countless hours (and even days) organizing and understanding the container data provided by their ocean carriers and freight forwarders. By the time they’d get their spreadsheets organized, the data was already outdated.

Now thanks to Gnosis’ proprietary Marlo™ freight tracking engine, these respective tasks are accomplished automatically in the background, providing unmatched container visibility and enabling timely and effective decision making. This new level of supply chain visibility has allowed the customer to drastically reduce demurrage and detention charges.

The results? A nearly 50% reduction in monthly demurrage and detention fees in the first month and an 80% monthly reduction by month four. As of this writing, August 16, 2022, Gnosis has helped save this customer approximately $11.8 million year-to-date on demurrage and detention related expenses and given them the data needed to hold poorly performing partners accountable.

Demurrage and Detention Alarms are now a standard feature in every CLM Platform, and one of the most immediately impactful features. Gnosis customers have used D&D Alarms to save hundreds of thousands, to millions of dollars per year.

Gnosis’ CLM Platform provides companies with full end-to-end visibility of their container lifecycles globally, automatically identifying the exceptions and potential disruptions in the supply chain. This enables logistics professionals to focus their time on proactively managing the exceptions to help avoid demurrage costs, detention costs, and other unnecessary logistics costs that result from disruptions.

Want to learn more about how Gnosis can help solve the biggest challenges you’re facing in your supply chain and logistics processes?

Click here to schedule a demo.