The essential shipping port guide for beverage importers
There’s a lot to think about when transporting your wine, beer, or spirits to/from a shipping port, so it pays to have a good idea of the big picture. That being the entire logistics process. However, understanding what a shipping port is, is essential, as some of the cost you pay in your freight bill includes charges for services performed here.
Knowing the differences between types of shipping ports and understanding fees such as demurrage, detention, and storage charges will help you get your beverages to their destinations safely, efficiently, and cost-effectively.
Read on to learn key facts about shipping ports and find out how you can minimize costs.
Here are some essential facts about shipping ports to keep in mind:
The world’s ports can be classified by annual container volume, or how many standard TEU (Twenty-foot Equivalent Units) containers they handle in a year.
Here are the world’s five busiest ports according to Lloyd’s List:
The first port listed outside of Asia Pacific and the tenth-largest port by volume is Rotterdam. Knowing how important Chinese ports are to world trade, may also help you to understand where all the containers went during the shipping crisis.
Ports come in all shapes and sizes and fulfil many functions. They can range from facilities in natural harbors upgraded to handle the needs of modern shipping, to completely artificial constructions such as Dubai's Jebel Ali port. But in a nutshell, a port is a dedicated area for handling ships, cargo, and passengers.
Here are some important categories of shipping ports:
Seaports are the most typical category of commercial ports, and they are usually located in or near major cities. They are a vital part of a country’s national infrastructure and serve as entry and exit points for short or long-distance maritime traffic. Seaports are also important players in the global supply chain for wine, beer, and spirits. They facilitate a wide range of shipping activities and link customers and suppliers around the world.
These specialize in facilitating shipments of goods and raw materials. Modern cargo ports are designed to load and unload vast amounts of cargo. Some are purpose-built to process one kind of cargo, such as chemicals, while others can manage many different types of goods.
A common type of cargo port is the container port, which handles shipping containers transporting cargo like wine, beer, and spirits.
This is a terminal located inland at some distance away from its associated seaport but connected to it by road, rail, or other transport services. Dry ports may host facilities to support the maritime terminal such as distribution centers, warehouses, container depots, or logistics centers. Shifting these services off-site reduces congestion at the seaport and allows for easier handling of inbound and outbound traffic.
Not to be confused with a dry port, an inland port is a port located on a river, canal, or lake that is also accessible to sea-going ships. They are usually shallower than seaports and cannot accept deep-draft vessels.
On top of arranging container pickups, transportation, customs clearance, and other tasks related to shipping your beverages, you also need to be increasingly aware of demurrage, detention, and storage charges. They can add an unexpected 10-15% to your total shipping cost if your shipment is not managed diligently. But, what are these charges, and how can you avoid them?
Sometimes referred to as accessorial charges, demurrage, detention, and storage fees are essentially fines for returning containers late or taking up valuable storage space.
Shipping lines allow for a certain length of time, called ‘free days’, for your containers of wine, beer, or spirits to be delivered, loaded, unloaded, or picked up at the shipping port.
However, demurrage and detention penalties are levied by shipping lines if you use their carrier-owned containers (COCs) for longer than agreed and return them late.
They use these late fees as an incentive to keep containers available and in circulation. The charges will apply daily until you return the container to the company.
The meanings of demurrage and detention are quite similar, and the main difference is whether we’re talking about containers inside or outside a shipping port terminal.
Demurrage is charged to shippers when a container is delayed inside a terminal. If your container of wine, beer, or spirits isn’t loaded on a ship or moved out of the terminal within the free days, you’ll start to rack up a daily demurrage charge for each container. The amount is different depending on the location and type of container.
Ocean carriers decide when the demurrage period applies, but they have to allow a reasonable free-time period. The allowed free time and demurrage charges should be outlined in your freight tariff or charter party.
If you’re exporting wine, beer, or spirits, demurrage can start when a container arrives at the shipping port terminal and may last until it is transferred to the ship or when the ship sets sail.
If you’re importing beverages, demurrage can begin when a ship arrives at the terminal, during unloading, or after unloading and ends when the container is removed from the terminal.
Like demurrage, detention charges are imposed if you don’t return your container empty of wine, beer, or spirits within the reasonable free days period. However, where demurrage applies to containers inside a terminal, detention charges concern containers outside a terminal. A shipping line will levy a daily charge for each overdue container, but the exact fee depends on the carrier, type of container, and location. The free time permitted for detention charges should be outlined in your freight tariff or charter party.
If you’re importing, detention charges can apply from the moment when a full container of wine, beer, or spirits is collected at a terminal and lasts until the container is returned empty to the container depot.
For exporters, the detention period may apply from the point your empty container leaves the container depot until the arrival of the full container at a shipping port terminal.
It’s worth noting that in most of South America, these terms are actually swapped around. That means there are countries where ‘demurrage’ applies to containers outside the shipping port terminal and ‘detention’ is used when containers are at the terminal. If you’re doing business with a South American partner, it’s a good idea for both of you to be very specific about locations and charges.
The third type of penalty charge to remember is the storage charge. These kick in when your container of wine, beer, or spirits arrives at a storage space at a container depot, in a warehouse, or at a terminal and last as long as the container remains there. Shipping lines impose them to keep space available in their warehouses, container yards, and freight stations. You should be aware that some warehouses do not offer free days before charges begin.
Shipping wine, beer, and spirits can be a complex process with lots of opportunities for mistakes and problems that cause delays. If the delays are long or your schedule is very tight, this can trigger accessorial charges.
Some examples of problems that could lead to charges include:
Unfortunately, the cost of such fees has increased dramatically over the last few years due to the many global disruptions that have affected the shipping industry. Events such as the pandemic, the war in Ukraine, and the container shortage have led shipping lines to slash the allowance of free days and hike demurrage and detention charges.
Planning how to transport your wine, beer, or spirits well and with a good knowledge of the stage of transportation will help you reduce the risk of accessorial charges. Here are five things you can do to minimize your risk:
Avoiding the mistakes, pitfalls, and problems that lead to delays starts with clear and accurate communication at every stage in the supply chain. Use a shipment management tool like myHillebrandGori to keep each stakeholder easily updated throughout the process.
Remember that your shipping line will allocate you some free days to use their container. So, make sure your supplier has your beverages and documentation in order,to get your shipment moving on-time. From here, your freight forwarder will manage the collection of the container, through to delivery. Remember, the more lead time you build into your shipments journey to meet the required delivery date (RDD), the more flexibility you have to deal with unexpected problems.
Research local customs requirements and legislation for your shipment's port of exit and entry. For Hillebrand Gori customers, we take care of the customs clearance, but if you are using your own broker, make sure they are knowledgeable in alcohol shipments and their paperwork requirements.
If you’re shipping wine in bulk, you can use flexitanks. You can avoid demurrage and detention charges if you can cross-pump your wine into a flexitank for on-site storage and free up the delivering container for a quick return.
Make sure that you know the demurrage, detention, and storage charges before your shipment sets sail and the allowed free time periods at the destination port.
We have the knowledge and experience to provide you with end-to-end logistics solutions that get your beverages to their destination safely and in the best possible transit time. Contact us to arrange the transport of your wine, beer or spirits, and we’ll help you avoid accessorial charges and deal with customs, all before your container even arrives at the shipping port.