The Real Cost of Dwell Time at the Warehouse and Its Impact on Transportation Spend

Posted by Port City Logistics on Nov 10, 2021 12:12:28 PM

Poor warehouse management can have a disastrous impact on transportation spend and brand reputation. Inefficiencies in the warehouse amount to inefficiencies in managing the dock, and excessive dock delays contribute to excess surcharges in freight spend. Dwell time is no one’s friend in logistics, and it’s going to cost much more than many people realize as demands on the industry increase. Unfortunately, dwell surcharges do not necessarily reflect the full scale and scope of cost increases that may arise from added delays. Let’s take a closer look at what this delay really is, how it affects downstream transportation, and why a top-quality provider of warehouse and drayage solutions can help.

Defining Warehouse Dwell Time and Why Carriers Charge It

As explained by Marine Traffic, “Port dwell time is the amount of time which cargo or ships spend within a port. It is a key indicator of how efficiently a port is operating, how quickly cargo is flowing through its terminals and how long a ship is spending in port.” Carriers create charges for excessive dwell time that extends beyond a period of “free time.” This is why the most common implication of excess waiting is dwell surcharges or detention charges, as they are sometimes called. Regardless, both are costs associated with delays waiting to load or unload a shipment. The costs associated with it are a way for carriers to recoup lost drive time, which is yet another issue that has come out of Hours of Service (HOS) regulations and changes affecting how long drivers can reasonably and safely work. Yet, it all comes down to how quickly and efficiently a warehouse operates and how long it takes a driver to unload/load a truck.

The Link Between Dwell Time and Downstream Transportation

When the time spent waiting to unload/load freight increases, it effectively leads to added delays in other modes of transportation, including over-the-road movements. As an example, consider the realities facing west coast ports in September 2021, as reported by “In Los Angeles–Long Beach, the asset slowdown is seen clearly in average on-terminal dwell time for non-rail imports across all 13 terminals in the busiest US port complex, which grew from three days to more than five days between July 2020 and July 2021, according to the Pacific Merchant Shipping Association. That, in turn, is related to backups at distribution centers where containers are delivered but taking longer to unload or taking longer to be picked up from the marine terminal.” The delays are amounting to a longer time frame for drayage turn times across containers and resulting in additional delays in getting imports addressed. This backlog is compounding and will inevitably lead to greater surcharges and fees by current port authorities and carriers. As a result, extended dwell or wait times not only impact inland transportation but also the costs of moving goods for short-hauls (drayage to warehouses). The problem only gets worse if warehouses are located further inland or if they have existing backlogs as well. 

How a Partner in Import OTR Transport and Storage Lowers Dwell Time

Working with an expert yields several core benefits that help to lower dwell delays. These include:

  • Access to nearby warehousing capacity, which helps reduce the amount of time equipment is away from the dock and lowers the risk of per diem fees. 
  • An increased understanding of activities and needs for loading/unloading not only at a port but also at an import-specific warehouse. 
  • Less confusion over finding available storage space and effectively lowering transit and dwell time.
  • Expertise in managing drayage, as well as working closely with port authorities to lessen the risk of per diem charges and delays in transport.
  • Access to a wider carrier base to move freight faster upon arrival and avoid extra delays too.

Overcome the Struggle and Costs of Warehouse Delays With Port City Logistics

Warehouse delays are a major problem for the shipping industry. While some dwell costs are inevitable, it is possible to lower the risk of excess delays and keep your costs under control. That’s why more companies are turning to experts in managing drayage and those with local warehousing storage space ready to hold freight while your warehouse prepares for its actual arrival. In turn, that amounts to fewer detention costs for your company, a lower risk of per diem fees, and improvements in your inventory management strategy along the way. Contact Port City Logistics to learn more about how your team can reduce the risk of dwell time today.

Topics: dwell time