Real-time tracking: enhancing visibility and accountability in logistics to reduce D&D charges

D&D charges aren’t inevitable. Here’s how you can save hundreds of dollars per day in the US and European ports.

Detention and demurrage (D&D) charges are a huge burden on logistics operations. Over time, they erode your profit margins and put a strain on supplier relationships. 

Between April 2020 and September 2023, US carriers collected a whopping $13.8 billion in D&D fees. So, how do you mitigate this?

The answer is simple: real-time tracking and accountability. Once you get granular insights into cargo movement, you can proactively manage delays, optimize workflows, and hold parties accountable. 

Keep reading to learn how to implement real-time tracking for better visibility and accountability in logistics. 

Real-Time Tracking & Monitoring: Investment, Not A Cost

The frustration of a delayed shipment is one of many headaches that logistics companies deal with. Not only does it disrupt delivery schedules, but it can also lead to hefty D&D charges.

Here's where real-time tracking and monitoring make a huge difference. At first glance, it may seem like just another cost to add to your list, but it’s actually a high-yield investment.

Real-time tracking uses technology like GPS, RFID tags, and sensor integration to provide a constant, in-the-moment view of your entire supply chain. This includes:

• Location and movement: Pinpoints the exact location and estimated arrival times of containers and even individual packages in real-time.
• Environmental conditions: Monitors temperature, humidity, and other environmental factors that could impact cargo integrity, especially for perishable goods.
• Status updates: Sends automatic alerts for key milestones, like departure, arrival at checkpoints, and delays. These updates can be integrated with your logistics management software for a more holistic view of your operations.

This constant stream of data offers immediate benefits, including minimizing D&D charges and more. First and foremost, real-time traffic updates allow for dynamic route adjustments, eliminating delays and fuel consumption. 

Plus, with all this data, your clients will never be in the dark about important updates. You can inform them proactively about potential delays and provide accurate delivery ETAs.

These are just a few examples of how real-time tracking acts as a major investment in your business. While there's an initial cost for implementing the technology, the long-term benefits are definitely worth it. 

By leveraging Northbound’s innovative real-time tracking solutions, logistics companies can achieve substantial savings, potentially reducing D&D charges by 40% to 50%, which is a significant return on investment.

Benefits of Real-Time Tracking And Monitoring

Let’s look at some of the main benefits of real-time tracking and monitoring. 

Automated Container Tracking Reducing Detention And Demurrage Cost

Demurrage charges add up when containers are held at the port beyond their free time allowance. Traditional methods of tracking containers often make it hard to anticipate potential delays and avoid these costs. 

Meanwhile, automated container tracking integrates data with port authorities in real-time to get an overview into container location, status updates, and arrival times. This allows logistics companies to proactively schedule container pick-ups and reduce the risk of exceeding free time. 

Data shows companies can save between $320 and $540 per day in US ports and €130 to €160 per day in Europe just by avoiding demurrage charges!

Alternatively, find out how much D&D costs you can save by scheduling a demo with Northbound. 

Provides Visibility Into Your Supply Chain

Detention charges kick in when the merchant needs to use the container outside of the terminal or depot beyond the free time period. It’s typically caused by delays in cargo pickup, changes in shipping schedules, and unexpected disruptions. Real-time tracking can help identify these delays early on, so you can take proactive measures like coordinating with the customer to arrange for an alternative.

Automated Processes to Reduce Human Error

Logistics operations often involve all kinds of manual tasks, leaving room for human error that can lead to delays and unforeseen D&D charges.

However, real-time tracking systems automatically collect data about container location, status updates, and arrival times. With no need for manual data entry, the errors that could lead to delays in paperwork or customs clearance are also minimal.

Competitive Advantage in the Industry

Companies that use real-time tracking report a steady increase in operational efficiency. Overall, it’s safe to say that it gives you a competitive advantage in the industry.

You’ll be able to provide accurate ETAs for better communication with clients – no more missed appointments or delivery delays. Satisfied customers are also less likely to dispute charges or incur penalties for late deliveries.

Other Factors Affecting D&D Charges

Real-time tracking can be an indispensable tool, but it’s still just the first step in the battle against D&D charges. 

Cost Fluctuations

One major hurdle is the dynamic nature of D&D rates. These charges fluctuate based on port congestion, peak seasons, and carrier and terminal policies.

Simply knowing a container's location does not reveal the specific D&D rates applicable at a given port. This lack of granular cost details may get in the way of effective decision-making and container prioritization.

Hidden Fees

Plus, beyond the core D&D charges, there’s a myriad of hidden fees you may not know about. That includes:

• An early/Late arrival charge is imposed when containers arrive at the port either early or late. However, with proper planning and forecasting, this cost can be avoided.
• Terminal handling charges, or THCs, are fees that terminal operators charge for handling the containers. You can’t get around this fee but who pay these charges is usually decided mutually between shipper and consignee.
• Penalties for incorrect documentation or missed appointments.
• Charges for using containers belonging to different shipping lines. These are called interchange fees. 

Container Prioritization

While real-time tracking does show you a container's location, it doesn’t tell you which container to prioritize first. Here’s how to decide which container to address first.

• Impending D&D Charges: Containers nearing the end of their free time should be prioritized to avoid late fees.
• Cargo Urgency: Urgent cargo may warrant expedited handling to reduce potential losses in case of delays.
• Customer Impact: Critical shipments with tight delivery deadlines need more attention to prevent disruptions and penalties.

Partner with a global logistics player to get the latest on real-time tracking and monitoring

Real-time tracking is just the start. To have complete control over D&D charges, you need a deeper understanding of dynamic rates, hidden fees, and prioritization. Partner with a global logistics expert like Northbound. 

We offer advanced tools and insights to turn your tracking data into actionable cost-saving strategies – schedule a demo today!

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