Free time: Calendar consecutive days from date of discharge
When the thought of South America crosses your mind, efficiency wouldn’t be the first thing you think of. Neither is the region known for their organizational skills - perhaps the lack thereof - especially in the ocean freight industry. And unfortunately for shippers, this translates to a higher chance of delays and chalking up avoidable extra charges at South American ports.
Containers arriving in South America usually have an allocated standard seven free days before carriers start charging delay fees. This figure is, of course, not fixed and varies from country to country and shipping line to shipping line.
In certain countries, it’s not uncommon for shippers to take a long time to get their cargo cleared. This is especially so in Brazil, Argentina and Ecuador. This delay, if unanticipated, could very easily result in exorbitant fees imposed by both the port and the shipping line.
To avoid facing unnecessary delay fees, we highly recommended that you, as a shipper, try to request extra free days from your shipping provider. This number depends on the country of destination, as well as your cargo. Generally speaking, any number between 14 and 21 should be a safe bet. You may request these free days in advance, ideally before or while you book your shipment.
In special cases such as land-locked Bolivia, shipping lines already offer additional free days since cargoes often transit through Chile. This is as long as it is stated on the Bill of Lading that the cargo is in transit to Bolivia. If you plan on handling your own cargo move from the port of discharge in say, Arica, extra free time should already be included. Case in point: MSC offers 7 free days in Brazil and Argentina and 21 free days in Bolivia.
Do keep in mind that certain carriers already offer more than the usual seven days. This means that bargaining for more leeway may prove difficult. But there’s certainly no harm in trying to gain a bit more time cushion.
One aspect that shippers often fail to consider is that shipping lines sometimes require a container guarantee fee. This prevents damages or theft for when the container is gated out. It applies in certain South American countries including Ecuador, Colombia, Venezuela and Peru. Case in point: Maersk charges a guarantee fee of $500 and $1,000 for 20-feet and 40-feet dry containers respectively for ports in Ecuador. It’s best to keep an eye on the fine print of this fee as these amounts can easily add up to between $1,000 and $3,000.
The good news: it’s possible to avoid paying this fee. Depending on the importer and their cargo volumes, you can possibly apply for an exoneration of this guarantee. This is usually negotiated between the consignee and the local terminal. Likewise, request for this at the origin or prior to making your shipping booking.
In short, having to pay avoidable extra charges at South American ports can be a pain. As with all international shipments, it’s best to check these details with your shipping line and country of destination in advance. Best to have these nitty-gritties sorted out than face a shock of a bill.
Do not underestimate the importance of free time and exemption from guarantee fees. Sometimes, these shipping nuances are more relevant than the freight itself. Demurrage costs can easily skyrocket to thousands of dollars. These benefits can, in a way, be more valuable than saving, say, $100 on freight costs.
Contact our sales representatives to find out if you can get these fees exonerated.
"Don't underestimate the value of Incoterms and their impact on international trade."
Aliona Yurlova, Business Development Manager at iContainersDOWNLOAD THE FREE GUIDE