Port storage and demurrage charges can quickly add up and become unmanageable, especially when importing a large number of containers. There are various ways to mitigate these types of fees to help you save costs. One of these ways is through pre-pulling containers.
A pre-pull is when an import container is moved from the port to an interim storage area outside of the port, in order to avoid port storage and demurrage charges. The pre-pulling of containers is typically managed by the trucker and the containers are usually stored at the trucker’s yard or warehouse, before being ultimately delivered to the consignee.
In this article, we’ll take a closer look at the advantages of pre-pulling, how this type of container movement is organized and discuss some additional tips that can help you save money.
When is a Pre-Pull Advantageous?
Pre-pulling containers from the port may not always be the right choice as staging, storing and unloading containers takes space and costs money. However, pre-pulls can be used strategically to save costs in certain scenarios, when the free days from carriers and ports are about to end.
Pre-pulling containers to an interim storage facility is cheaper than leaving them at the port, until the consignee is able to receive them for unloading. Let’s discuss the 3 best advantages in more detail.
1. Avoiding Demurrage Fees
Paying demurrage fees to carriers can be very costly. As port congestion can heavily affect operations, carriers implement various tiers for demurrage charges that start when the container is discharged from the vessel, until it is gated out of the port.
Therefore, consignees tend to work closely with freight forwarders or trucking companies, in order to pull the containers out of the port on the last free day. This helps them to avoid potential demurrage fees.
3. Reducing Port Storage Fees
Similar to carriers, ports charge cargo owners storage charges for keeping the container at the port for longer than the free days. Port storage charges start once the containers are discharged and end once they gate out of the port.
Pre-pulling containers allows the consignee to mitigate or even avoid port storage charges completely, by moving the container out before port storage charges occur.
4. When Consignees Have No Parking Facility
Sometimes, the consignee’s use the port as a storage extension of their facility or warehouse. If they are unable to receive and unload cargo, they may ask their nominated trucker to pre-pull containers and hold them in their storage yard for a specific period of time.
This could be due to plant or facility congestion, insufficient loading bays or lack of container parking capacity. Once these issues are alleviated, the consignee requests the trucker to deliver the respective containers.
Container Pre-Pulling Process
Consignee’s will typically monitor their yard carefully and plan containers well in advance. The logistics and operations team will also monitor any potential demurrage and port storage charges that are about to occur.
As they usually have rate agreements with carriers that indicate the amount of free demurrage days, they are able to compute when certain containers need to be gated out from the port.
They will then decide if there is enough capacity in the facility to receive the containers. If that is not the case, they will request their nominated trucker to pre-pull the containers to an external yard for temporary storage.
Once the consignee is ready to receive the containers, they will give the instruction to the trucker. The trucker will then plan the delivery of the laden container to the consignee’s facility and charge them a fee for pre-pulling and storage.
Depending on the size of the business, consignee’s may engage a 3PL or 4PL to render container planning services on their behalf.
Who Arranges the Pre-Pull?
The decision to pre-pull containers ultimately rests with the cargo owner, which is the shipper or the consignee, depending on the freight terms. The nominated trucker, 3PL or 4PL, then arranges the actual move based on the instructions from the cargo owner.
How Much Does Pre-Pulling Containers Cost?
Pre-pulling charges differ depending on the trucking company and location or distance. There are typically two types of charges associated with pre-pulling; the container transport from the port to the temporary yard and from the temporary yard to the consignee’s facility, as well as the yard storage fees.
The pre-pulling trucking charges range from about $200 – $400 for the container transport and a fixed per day fee for the storage. This can be worth it, since the demurrage and port storage charges can easily amount to about $100 – 300 per day.
Similar to demurrage and port storage charges, pre-pull fees are charged to the cargo owner. Therefore, it is in their best interest to avoid demurrage and port storage fees by pre-pulling containers from the port on their last free day.
Useful Tips on Avoiding Pre-Pulls
Pre-pulling is advantageous if you’re trying to avoid demurrage and port charges, as it can be used as a strategy to save costs. However, there are also other ways and strategies that you can adopt to not only save demurrage and port storage charges, but also reduce the amount of pre-pulling required.
- Shipment Planning – Plan your shipments well in advance and work with your supply chain partners to ensure that all shipments follow a standardized process and timeline. Plan cargo receiving in a way that does not require you to keep containers in the port for a longer period of time.
- Shipment Visibility – Shipping schedules and container tracking tools are important to give your supply chain the visibility it needs. This will help you understand when shipments are going to arrive so that each of your vendors can prepare for their responsibilities.
- Negotiating Demurrage Terms – Work with your ocean carriers or freight forwarders for longer demurrage free days. Alternatively, you can request them to offer you combined detention and demurrage terms. Some offer a combined detention and demurrage of about 15 to 30 days.
- Work with 3PLs or 4PLs If Required – Depending on your volume and the skill sets of your team, you may consider working with a 3PL or 4PL, who will be able to take over your shipment planning processes. These services typically include cost saving initiatives such as managing port storage and detention, as well as pre-pulling containers when required.
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About the Author
Gerrit is a certified international supply chain management professional with 16 years of industry experience, having worked for one of the largest global freight forwarders.
As the co-founder of freightcourse, he’s committed to his passion for serving as a source of education and information on various supply chain topics.