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Maersk Takes on Port Demurrage and Detention

Maersk revealed the results of a new study that shows its Destination Cargo Management (DCM) program reduces demurrage and detention (D&D) exposure by 50 percent.

Maersk North America’s DCM product is designed to optimize destination planning and delivery in supply chains. This segment holds the most opportunity for importers to reduce D&D storage costs and improve the end user experience, the global cargo container giant said.

Maersk recently performed a study of storage costs in the North America Warehousing and Distribution (W&D) market to identify trends in D&D costs on the inland leg. Using a sample size of 1.2 million containers from 2019 and 2020 spanning multiple customers and North America regional markets, the survey analyzed the average dwell time for containers for every Maersk W&D customer. The findings revealed that DCM-managed customers experienced less than half the D&D cost exposure compared to non-DCM customers.

Several of the nation’s largest importers are using the service with consistent success today, Maersk said. The data-driven approach highlights dwell time at terminals, at distribution centers and in off-site storage yards, DCM analysts actively assist clients and their trucking providers with D&D mitigation strategies.

To achieve the results, DCM uses container tracking at multiple steps–from the time of sailing at origin and U.S. port arrival, to U.S. Customs clearance, port outgate to warehouse arrival and empty return to the port.  The system integrates electronically with truckers and customers’ distribution centers.

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“We have analysts in each one of our regional markets who hold daily calls with the customer and their drayage providers to review metrics, highlights problems and delivery issues,” Matt Koivisto, head of Maersk’s North America W&D Transportation East region, said. “This open communications process provides the truckers with a forum to highlight concerns at ports or warehouses so that we can take corrective actions.  When the service is deployed network-wide, it provides customers with a powerful performance management tool that removes perceptions from the equation and instead focuses on root cause problem-solving. We’re able to bring performance management to a whole new level through this holistic approach, which starts with knowing the origin info upstream.”

Koivisto said the trucking industry is challenged with surging container volume and a lack of drivers to keep pace with the demand. The industry is fragmented with 95 percent of the trucking companies having fewer than 20 drivers and often times lacking sufficient IT systems, he added.

“To address this, Maersk is working with truckers to onboard them to TradeLens, an industry-backed platform where all uploaded documents are underpinned by blockchain technology, as a way to overcome their IT roadblocks, lack of resources, and offer access to new visibility and optimization technologies,” he said.

Mark Venard, head of Maersk’s DCM unit in the U.S., commissioned the analysis to showcase the value it brings to clients. Venard said changes and disruption are inevitable in supply chains, especially near the destination, so the system is geared to show early warning signs and ways to stay agile with decision-making and viable routing options.

“It’s cool to see the end-to-end performance come together for customers who are dealing with a constantly-changing flow of goods, consumer buying patterns and a faster-paced business cycle,” Venard added.

A.P. Moller-Maersk is an integrated container logistics company that operates in 130 countries and employs 80,000 people.