What is Detention and Demurrage\n\n\n\n\n\tIn simple terms, detention is charges by the Vehicle Operated\nContainer Carrier (VOCCs) for the use of equipment, while detention\nis a charged fee for the use of Maritime Terminal Operator\u2019s (MTO)\nspace. Although these charges are levied by VOCCs, they are assessed\nby Port Terminals or MTOs and Container Depot Operators. \n\n\n\n\n The Contract of Carriage normally stipulates a \u201cFree Time\u201d for exports to present the container to the Terminal before it\u2019s shut out period, or for importers to return the emptied container to the appointed container depot before the \u201cLast Day\u201d period. \n\n\n\n\n\n\n\nWhat is the significance of Detention and Demurrage\n\n\n\n\nUltimately, one of the\npurpose of the levy of Detention and Demurrage is to protect the\ninterest of the VOCCs so\nthey can quickly circulate their container for other uses. Another\nprimary reason for these charges is to facilitate the efficiency of\nPort Terminal Operators and all other parties related to the supply\nchain. Recent Federation\nof Maritime Commission\u2019s\nreport has\nrightfully concluded that Detention and Demurrage plays a big role in\nensuring the smooth operation of the supply chain engine. But\nthe perceived increasing\ncharges is also addressed\nat length on the Federal Maritime Commission report.\n\n\n\n\n\tA few factors has caused the freight forwarders, shippers and\nconsignees to feel victimized by the perceived increasing charges of\nDetention and Demurrage by liners over the years to name a few, the\nfive day work week of VOCCs\u2019 documentation office vis-a-vis a 24\/7\noperating port terminal, the misinformation and documentation errors,\nthe complicated matrices of \u201cFree Time\u201d which is too lengthy to\nbe explored in this article and the many involving parties that play\na role of delivering goods to and from traders. \n\n\n\n\n Logistics Landscape of Malaysia\n\n\n\n\nIn\nAugust 2008, Malaysia Container Depot Association has announced the\ncharge of RM 5.00 per container to the hauliers, which is then passed\non to the local traders. Now, upon the writing of this article, the\nDepot Gate Charges has increased to RM 30.00, equivalent\nto an\nannual compounded increase of 25%. Depot operators are hired by VOCCs\nto monitor incoming containers and stage the containers to the\nrequest of the VOCCs, traders would conjecture that VOCCs has passed\non the cost of monitoring it\u2019s equipment to the traders.\nThis, compounded by the fact that the tariff for Detention, Demurrage\nby VOCCs are ever increasing year on year has created a strong\nconception among the trader and it\u2019s logistics solution provider\nthat Malaysia\u2019s cost of transportation is ever increasing. \n\n\n\n\n The Edge reported in this article said that Economic Planning Unit Malaysia set a condition that a dedicated berth would require the container liner to own a stake in the berth, much like Maersk Line holding a substantial stake in Tanjung Pelepas, Johor. Therefore, it is not a big leap to conclude that this stance Malaysia has taken has given MTOs more leverage and dominance in setting the operational costs to pass over to the local SME logistic service providers and finally the local traders. \n\n\n\n How does Malaysia Measure up in terms of standards compared to other neighboring nations\n\n\n\n\n\tThe Gulf Cooperation Council\u2019s container depot development has\nbeen bright in light of recent announcement of COSCO Shipping Line\ndeveloping the large container freight stations. Singapore has an\nestimated Container Depot Operator of 61 active container depots.\nMalaysia on the other hand only has 45 active container depots.\nGranted that there many factors that may attribute to the low numbers\nof container depot operators in Malaysia, but when looking into the\nhigh cost of Detention and Demurrage as well as container depot gate\ncharges. One way forward to increase Malaysia\u2019s competitiveness and\nefficiency as a trading hub is to increase the amount of container\ndepot operator. This will spur competition among depot operator and\nspread the inland container road movement to a wider network of roads\nto reduce container congestion. \n\n\n\n\n The Way Forward\n\n\n\n\n\tContainer Depot Operator, Maritime Terminal Operators, Port\nAuthorities all share the responsibility of taking Malaysia to the\nnext level in terms of trade. VOCCs are largely in the dominant\nposition in logistics and have the upper hand in determining the\ntariffs applicable. It is up to Malaysia to up the ante and improve\nlocally in order to stage itself in a better bargaining position to\nstop VOCCs from increasing it\u2019s Detention and Demurrage charges.