Avoiding Costly Storage Charges

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As an importer, your top priorities include getting good value for your money, and timely delivery of your goods.  Unexpected storage charges can seriously disrupt your careful plans in both areas, damaging both your customer relationships and your cash flow.

You can avoid – or at least minimize – this type of financial pain, by working with your customs broker to:

  •  understand where, why, and how storage charges occur

  •  take positive steps to prevent them, through timely documentation and shipment monitoring

Although the details vary for different types, all import shipments come to at least one place in their movement where some specific action is required, before the shipment can continue on the next step of its journey.  This action may be one (or more) of:

  •  customs release

  •  other regulatory agency release

  •  carrier’s release of its interest in the shipment

  •  payment of “collect charges” or other accrued charges due against the shipment

  •  cargo release or delivery instructions

Generally, this location will be one of the various types of cargo terminals.  The type will depend primarily on the mode of transportation the cargo is currently moving in.  Some of the most common are:

  • air – air carrier’s cargo ground handling agent at destination (may be either on or off airport)

  • ocean, full container (FCL) – ocean carrier’s marine terminal, either at port of discharge or at an inland point

  •  ocean, less than full container (LCL) – consolidator’s destination Container Freight Station (CFS)

  •  truck – land border crossing point, or trucker’s terminal (may be either at destination, or at an intermediate point)

  •  rail – land border crossing point, or rail carrier’s destination rail terminal (includes ocean containers moving by rail to inland points)

At each type of terminal, the carrier (or terminal operator, if different) will normally allow a standard amount of “free time” after shipment arrival at the terminal, before storage charges start.  The amount of this “free time”, the basis on which charges are calculated, and the rate at which the charges accrue, can vary from one operator to another.  Many operators do not count weekends and holidays toward “free time”, but almost all operators do include weekends and holidays in billed storage time, once storage starts.  Typical examples include:

  •   air cargo – usually two (occasionally three) business days free time.  Rates are normally in dollars per hundred pounds of cargo weight per day, usually with a total minimum storage charge per shipment, and often with daily minimums.

  •   ocean FCL cargo – typically four to five business days free time at marine or inland terminals for “dry van” containers, two (occasionally three) days for temperature-controlled or other specialized equipment.  Rates per container commonly vary from $150 to $450 per day for “dry van” containers, and $400 to $950 per day for temperature-controlled containers or other specialized equipment.  Many carriers and terminals increase their daily rates after the first few days of storage.

  •   ocean LCL cargo – typically four or five days free time at destination CFS.  Rates are normally in dollars per hundred pounds of cargo weight per day, frequently with a total minimum storage charge per shipment, and occasionally with daily minimums.

  •   truck cargo – free time and rates are highly variable.

  •   rail cargo – for full marine containers at rail terminals, typically one to three days free time after consignee notification of physical availability.  Rates per container commonly vary from $100 to $400 per day.

The easiest way to avoid having your shipment held at any of these locations is to ensure that your customs broker receives information and documents early enough to:

  • prepare and file the Importer’s Security Filing (ISF) for ocean shipments, which should be at least two business days before vessel departure from the port of loading

  •   prepare and file the customs entry for your shipment, and receive a customs response

  •  allow any necessary time for other regulatory agency review and release

  •   pay any “collect charges” on your behalf

  •   if required, endorse and surrender Original Bill of Lading (OBL) on your behalf

  •   arrange cargo release or onforwarding to you or your customer

All at least two business days for an air shipment, or five business days for an ocean shipment, before that shipment arrives at its destination. 

Depending on specific circumstances, carrier release may require one or more business days after the carrier receives the endorsed OBL (if required), and/or any “collect charges” due against the shipment.  To avoid possible delay, “earlier is better” here – much better!

Transmark Customs Brokers is always available to help our clients identify specific opportunities for positive steps to avoid having your cargo held for any of these issues, and to help you avoid the financial and operational pain they can bring.