Storage Charges

Storage Charges: The Ultimate FAQ Guide

If you’re wondering what storage charges are, you will find all information right here.

So, keep reading to learn more.

What Are Shipping Storage Charges?

Shipping container yard

Shipping container yard

Shipping storage charges is the fee levied if the shipping container is not moved out of the port within the free days offered by the port.

The storage period starts when the container enters the storage facility and ends when it is taken out of the facility.

The amount of the charges depends on the weight of the goods, the storage space the goods are stored.

Who Charges Storage Charges?

It will depend on an entity that stores the shipping container i.e.

Port storage charges

  • Port storage charges are levied for both empty and full containers within the port.
  • They are often passed from the terminal operator to the shipping line
  • The containers to be shipped are charged according to the levy offered by the freight forwarder or the ports authority.
  • The ports authority impose taxes on the cargo as a storage charge as the cargo is waiting to be cleared, the cost will determine on the efficiency of the documents.

Warehouse storage charges

  • Freight forwarder issues an inventory which includes the storage charges plan for the cargo waiting to be shipped to the receiving port.
  • Warehouse storage charges are associated with general administrative expenses, storage space hence it varies with the services required.

Are There Recommend Storage Charges Rates?

Storage fees depends on the Unit’s length, width, and height, the number of units and the time for the inventory.

From January through September, the standard fee is $0.025 per cubic foot, per day.

    • This is equivalent to $0.75 per cubic foot over 30 days.

From October through December, the standard fee is $0.080 per cubic foot, per day.

    • This is equivalent to $2.40 per cubic foot over 30 days.

For the units that are in inventory for more than 365 days, the future long-term storage fees will be as follows:

  • The standard fee is  $0.230 per cubic foot, per day.
    • This is equivalent to $6.90 per cubic foot over 30 days.
  • The minimum is $0.150 per unit, per day.

How Can You Avoid Storage Charges?

  • Be quick on the customs clearance.

Work with the right freight forwarder to manage your customs brokerage and collect all the clearance documents needed for the import.

  • Use experienced freight forwarders.

They help Plan your shipment’s journey, finding a competitive storage solution, handling documents and complete key administrative steps.

  • Make sure your cargo is ready on time

Make the most of the free time allowed by the shipper making your cargo ready for pickup on time.

  • Have real time information.

Track all your containers and receive alerts with container to help you make good decisions in case of delays to avoid costs.

  • Communicate proactively.

The communication between broker, carrier, driver, shipper and consignee should be open and clear.

How Do you Calculate Storage Charges?

You multiply the length and width to determine the number of cubic feet of the storage required.

In Most warehouses charge depend by the number of spaces you rent per month.

Warehouses storage charge by square foot of floor space or the cubic foot of the space required.

Stack the goods you will require to be stored in containers or boxes.

Measure and record the length, height and width of the stack.

Multiply the length of the stack by its width.

Multiply the length and the width by the highest point to determine the number of cubic feet of storage required.

Divide the size in cubic feet by the size of the self- storage bay.

The answer is the number of bay that you require.

Multiply this number by the monthly rate for the storage bay.

Shipping container dimensions

Shipping container dimensions

Fee Calculation

To calculate the unit volume, take the length, width, and height (in inches) of a single unit. Multiply length x width x height to get the volume in cubic inches.

Convert this volume to cubic feet by dividing by 1728.

Round this volume up to the nearest hundredth to get the value on which is computed as the storage fee.

  • Example: We have a container with units of dimensions 20″ x 16″ x 8″. The volume in inches is 20 * 16 * 8 = 2560 cubic inches. In cubic feet, this volume is 2560 / 1728 = ~1.48148 cubic feet. We round this value up to 1.49 cubic feet. This is the volume on which is computed as the storage fee.

What Will Make You Pay For Storage Charges?

Some of the key factors include:

  • Extending the time when the container should be loaded on the ship when the ship departs without your cargo.
  • When the appointment at the receiving location is delayed as earlier as planned by the inconsistency of the freight forwarder.
  • Not understanding the chatter agreement which is offered before the cargo is released from the port.
  • Not Making timely document release if the cargo is under letter of credit.
  • Not making delivery documents available to all the involved parties for easy loading and unloading process.
  • Fewer Interactions with the driver, loader, broker and port authorities who partner with the freight forwarder.
  • Not securing a copy of an original bill of lading to safe guard the shipper’s payment when the cargo reaches the destination.
  • Inability to Negotiate with the port authorities for an increase in the number of free days when you are aware that there will be delays on the clearance.

Is Demurrage Charges And Storage Charges The Same?

No.

Demurrage charges refers to the charge that the merchant pays for the use of the container within the terminal beyond the free time period.

Shipping storage charges is the fee levied if the container is not moved out of the port within the free days offered by the port

Demurrage is avoided by ensuring that the appointment at the receiving location is not delayed as earlier planned.

The storage period starts when the container enters the storage facility and ends when it is taken out of the facility.

Are Detention Charges Same As Storage Charges?

Detention vs demurrage

Detention vs. demurrage

No.

  • Detention charges are almost similar to demurrage charges but these charges are billed outside the port terminal.
  • Detention charges starts immediately when the full container is removed from the port up to the return of the empty container to the port.
  • For detention providers have to give out a reasonable free-time period.
  • Shipping storage charges is the fee levied if the container is not moved out of the port within the free days offered by the port.
  • Storage charges are collected for both full containers that are waiting to be shipped and the empty containers too.
  • Storage charges starts when the containers enters the storage warehouse and ends when it is taken out of the warehouse.

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