LONG BEACH, Calif., April 6, 2022 (GLOBE NEWSWIRE) — Alliance Dray today released an outlook for April based on activity within its container trucking hub from February to March 2022. Dray Alliance’s findings reflect the impact of continued port disruptions and demurrage charges incurred by shippers with containers sitting in ports.
The issue of demurrage has become a financial burden for those with containers waiting at ports, especially the Port of Los Angeles. Detention and demurrage penalties have skyrocketed since the start of the pandemic and as further supply chain disruptions have occurred. According to Dray Alliance, drayage carriers have been prevented from picking up loaded imported containers due to unpaid demurrage charges – a major factor in delays and slowdowns.
“Containers sit in ports and demurrage charges continue to pile up, not by choice but by the difficulty of recovering them. This has caused a financial burden for everyone in the industry,” said Steve Wenn, co-founder and CEO of Dray Alliance. “In our experience working with the Port of Los Angeles, we have seen how the data confirms the penalties paid due to demurrage charges. continues to port arrears.”
A Forbes item quoted the American Trucking Association, which reported that this industry is headed for a shortage of 160,000 drivers by 2030. Additionally, they estimate the need for one million new drivers over the next 10 years. As container volume has reached record levels, truck driver capacity has not kept pace with the growth, resulting in appointment slots remaining limited, leading to increased demurrage penalties . As March data shows, of all containers currently unloaded at the Port of Los Angeles, 41% are experiencing demurrage, meaning a total of 25,258 of 61,944 shipments are more than five days late after unloading.
“Carriers see these penalties — whether good or bad — as a profitable part of their business,” said Brian Glick, CEO and founder of Chain.io, a systems integration platform that works closely collaboration with shippers and freight forwarders.
“So even if the Ocean Shipping Reform Act passes, they will comply with the law, but not work against their own interests. This is a for-profit entity, and it’s hard to imagine them sacrificing voluntarily a profitable part of their business for what is seen as a moving target of fair play,” he added, in a recent Supply Chain Management Review item.
Dray Alliance data from February 2022:
- The mean time from discharge to discharge was 5.8 days. Assuming four free days at the terminal, this averages 1.8 days of demurrage per shipment.
- Depending on the terminal, the charge for one day of demurrage varies between $175 and $225/day; which increased over time and averaged $168.75 per day
- During that month, the Port of Los Angeles moved 424,072.85 TEUs of loaded imports (212,036 feet).
- Using this metric as the total number of containers, shippers paid $71.56 million in demurrage charges through POLA in February 2022.
Dray Alliance data from March 2022:
- The average unloading time was 4.9 days, assuming four free days at the terminal, or 0.9 days of demurrage per shipment on average.
- Using a daily demurrage rate of $187.50, the average March shipment through the Port of Los Angeles resulted in additional demurrage of $337.50.
- In March, the Port of Los Angeles carried 509,953 TEUs of loaded imports (254,977 FEU).
- Using FEU as the total container count, shippers paid $43.03 million in demurrage charges through POLA in March 2022.
Based near the Port of Long Beach, the Dray Alliance platform provides comprehensive container management, including automated status notifications, real-time GPS tracking, and document management and analysis for each container. In December 2021, Dray Alliance has completed a $40 million Series B funding round led by global venture capital group Headline.
About Dray Alliance
Dray Alliance is a corporate-backed startup focused on building a container trucking platform to deliver shipping containers from ports to warehouses. Its technology connects container shippers to a network of approved truck drivers through a mobile app. By leveraging API integrations with mobile app ports and data, Dray Alliance’s platform allows container shippers to manage and track all container deliveries on a single web portal and make more efficient truckers. The company has raised a total of $55 million in venture capital and working capital funding, and is already working with more than 100 corporate clients, delivering thousands of containers per month. Steve Wen is the co-founder and CEO of Dray Alliance, and was named to Forbes’ 30 Under 30 2022 list. Please visit drayalliance.com for more information.