🇦🇺Australia

Disparity in Demurrage Start-Date Calculation Across Carriers

2 verified sources

Definition

In Melbourne, some shipping lines count detention free time from Day 1 of terminal discharge, while others count from Day 1 of terminal availability—a difference that can span days. Vessel unloading typically takes 2–3 days but may take up to 7 days in exceptional cases. Demurrage may start during vessel unloading, after unloading completion, or directly upon vessel arrival. This variance is applied inconsistently, and shippers have limited recourse to dispute non-standard calculations. The ACCC Report found this practice harmful to cargo owners.

Key Findings

  • Financial Impact: Estimated AUD $500–5,000 per dispute (legal/resolution costs) plus AUD $100–250/day per container in contested charges. Risk of payment holds and service suspension by shipping lines.
  • Frequency: Recurring across all shipments; disputes escalate during peak congestion periods.
  • Root Cause: Lack of regulatory standardization; carrier discretion in defining free-time trigger dates; insufficient transparency; ACCC enforcement limited to competition grounds rather than consumer contract fairness.

Why This Matters

The Pitch: Australian cargo owners face potential legal disputes and payment holds due to charge calculation opacity. Standardized, automated charge verification prevents disputes.

Affected Stakeholders

Importers, Exporters, Freight Forwarders, Legal/Compliance Teams

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Unreasonable Detention and Demurrage Charges Assessment

AUD $100–250+ per container per day. A typical importer with 10 containers delayed 5 days beyond free time faces AUD $5,000–12,500 in avoidable charges.

AML/CTF Cash Reporting Non-Compliance

AUD $13,000–$25,000 per breach (AUSTRAC civil penalty guideline); estimated 5-10 potential breaches/year for mid-size freight operator = AUD $65,000–$250,000 annual exposure. Manual reconciliation overhead: 20 hours/month × AUD $45/hour = AUD $10,800/year.

COD Cash Collection - Time-to-Bank Delays

Estimated 2-day average banking delay × 250 working days/year = 500 days delayed cash. Assuming AUD $50,000 average daily COD collections × 5% opportunity cost (cost of capital) = AUD $12,500/year. Manual reconciliation labor: 10 hours/week × AUD $40/hour × 50 weeks = AUD $20,000/year.

COD Cash Shrinkage & Reconciliation Discrepancies

Average 0.5–2% monthly COD cash shrinkage (industry estimate). Mid-size operator: AUD $200,000/month COD × 1.5% = AUD $3,000/month = AUD $36,000/year. Labor cost of investigation/spot checks: 5 hours/week × AUD $50/hour × 50 weeks = AUD $12,500/year. Total: AUD $48,500/year.

GST/BAS Reconciliation Errors on COD Collections

ATO penalty for GST understatement: 25% of shortfall (up to AUD $5,000+ per quarter). Estimated 2–4 quarters/year with GST timing errors × AUD $3,000 average penalty = AUD $6,000–$12,000/year. Manual BAS reconciliation labor: 8 hours/month × AUD $45/hour × 12 months = AUD $4,320/year.

Border Detention & Shipment Delays Due to Documentation Non-Compliance

Typical hold: 3-7 days delay × average shipment value AUD5,000-50,000 = AUD150-350 per day in tied-up capital; 50-100 holds/year per operator = AUD7,500-35,000 annual opportunity cost

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