Container detention charges have never been a popular impost among cargo interests. With long term lease costs on a general purpose TEU as low as a dollar a day, detention charges of A$15 or A$20 seem, at first blush, to be excessive.
This battle has escalated to outright warfare over the last week, with the Victorian Transport Association describing the charges as "a real money gouge by the shipping lines" and contemplating establishing a fighting fund to facilitate legal challenges to detention charges. Of particular interest to the VTA appears to be detention charges levied in circumstances where the delayed return of the container is brought about by congestion at a line's contracted depot.
The specific contractual basis for imposing container detention charges varies from line to line, but most follow a similar pattern. The line specifies a number of free days, after which the import container must be returned, clean and empty, to the line's nominated depot. If the importer complies, no detention is charged. However, if the importer fails to return the container within time, the line's detention tariff for late return applies.
This contractual base has a number of points of vulnerability, which are increasingly attacked by importers and forwarders who are aggrieved by the levels of detention charged.
Lines have an opportunity to structure their documentation in such a way as to maximise the recoverability of detention charges. As overseas principals sometimes charge local agents for detention, whether or not the local agent collects the charges from the importer, it is very much in both the line's - and the agent's - interests to ensure the documentation is in good order.
Middletons has many years' experience working with lines to develop effective detention clauses and contracting processes, which have enabled our clients to collect substantial sums and defeat or deflect customer resistance. In light of the current climate in Victoria, there has never been a better time to review your own systems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.