Turns out logistics industry professionals are familiar with more Latin than “E Pluribus Unum.” Whenever goods are transported internationally, the days they sit at a port are counted. A shipping container is allotted a certain amount of “free days”, which are the number of days that the shipment is allowed to sit at the shipping port without incurring extra charges. After this period is up, containers remaining at the port with be charged on a per-day basis, hence the Latin tagline, “Per Diem”, which translates to “Per Day”.
How to Avoid Per Diem Charges
Many importers and exporters have experienced per diem charges at some point in their career. These charges can get expensive, starting at a low of around $100 per day and reaching upwards of $600 per day in some instances.
Here are a few tips on how you can avoid per diem charges and get your containers out of the port during the allotted free days:
The contract you have with your carrier will indicate the exact number of free days your container will receive at the port. If you have any experience shipping from the port in question, you should know approximately how much time it takes to move your container. These numbers can be negotiated to ensure that the deal works out for you and your carrier. Make sure your carrier is well-informed of your concerns before negotiating. Have detailed experiences readily available if you have had previous issues at the port.
Whoever books the shipment is responsible for negotiating these free days with the carrier. In the case of many customers, their freight forwarder may be the one to do the talking. Interlog USA has negotiated many free day contracts with carriers on behalf of our customers to ensure charges are avoided and shipments move smoothly.
Containers have to be picked up from the port by a drayman, and depending on the port, this isn’t always an easy task. Congested ports such as LA and Long Beach make it difficult for draymen to get in and out, and certain cities may have draymen that are booked out farther in advance. This can make it difficult to get a trucker into the port to pick up your container before your free days expire.
Our biggest tip is to schedule a drayman as soon as you have a shipment booked. When you know the day the container will arrive, search for draymen that can handle the task. You don’t want to be looking for an available trucker the week-of.
We also recommend booking a drayman to pick up the container as soon as it’s available. In other words, if you have 4 days of free time, schedule the pickup for the first day, not the fourth. This way, if your drayman falls through for any reason, you will have a little bit of time to line up a backup plan.
Cleaning, Labeling, and Packaging
Unfortunately, many shippers experience per diem charges due to containers being pulled for inspections. U.S. Customs is allowed to pull containers for any reason even on the last allotted free day. If the container sits in an inspection site for over the free day time period, per diem charges will still incur.
While you can’t avoid being pulled for an inspection, you can avoid any negative outcomes. We highly recommend that you properly clean your container. If Customs finds any bugs, seeds, or vegetation that blew their way into the container at a foreign destination, the container may be rejected causing for further headaches. In addition, you should properly label everything in your container. If you have any hazardous goods or other materials that may raise caution, U.S. Customs should be able to find labels and documentation for everything immediately. This will decrease the chance of your container being rejected and lessen the amount of time your container is inspected for (hopefully resulting in a smooth transit out of the port).
Per Diem charges are unavoidable to a certain extent. Containers get pulled for inspections, draymen cancel, and other mishaps occur. But that doesn’t mean that you can’t take action to decrease your chances of being hit with heavy fines. Much of Per Diem charge avoidance comes from strategic planning. Make sure that you or your freight forwarder negotiate your allotted port free days with your carrier if needed. Line up draymen for container pickups as soon as you have ETA information. Finally, making sure your container is clean and goods are properly packaged and labeled can make Customs inspections go by with ease.
If you have any questions about the Per Diem charges you have experienced and would like to know more about how they can be avoided, reach out to one of our team members and we’d be happy to help you out!