Common Disputes in Transport: Who Pays the Demurrage?

Demurrage is and will always remain a contentious issue between transport providers and customers paying to get their freight moved. The causes of demurrage are many and varied. Some are easily avoided and others are impossible to foresee, let alone avoid. Demurrage is defined as a penalty incurred when a delivery driver, for whatever reason, is not able to pick up or deliver the goods within the agreed schedule. The larger delivery vehicles (such as semi-trailers), typically incur higher demurrage costs. But even a small half tonne ute will incur demurrage fees. They can be incurred for any number of reasons and disputes often arise as to whether the transport company was in a position to avoid the delay, or whether the delay was inevitable.

The Gate is Locked when the Courier Arrives

A classic example is the case of the truck driver arriving at the pick-up address to find that the gate is locked and there is no sign of life at the business premises. One might then reasonably expect the driver to get on to their mobile device, look up the details of the job, making a reasonable attempt to get in contact with the customer. But he simply decides to wait, knowing full well that demurrage fees will apply and that he will get paid just to sit there. After half an hour he calls through to the head office and advises that he is not able to access the address and he is instructed to cancel the job and head on to the next job.

Driver Could Have Reduced Waiting Time

Disputes in these cases will typically not revolve around whether or not the driver was delayed – he did undoubtedly turn up to a locked gate. However, the customer paying for the freight service may understandably be less than impressed with the apparent lack of initiative on the part of the driver. If he had called immediately and made an attempt to contact the customer, he might have expedited the process of gaining access to the premises, or avoided hanging around waiting for someone who couldn’t bring the key anyway.

Demurrage Due to Mechanical Failure at Pick Up

Another slightly controversial scenario can arise when the delay occurs at a place which is outside the customer’s control. Let’s say the customer has paid for the courier to pick up a pallet of goods which has been delivered to large depot and transport the goods to his own depot. Upon arrival the courier finds himself in a queue behind four trucks. On further enquires he discovers that the delay is due to a broken-down forklift. The question arises: who should pay for the demurrage? In almost all cases like these, the customer would grudgingly have to pay. After all, the courier has been instructed to pick up the goods within a specified time frame at a set price and if it’s going to take longer through no fault of his own, he should be compensated for this.

Customer Usually Incurs the Cost of Demurrage

From the transport depot’s point of view, the service they’re providing is to unload the goods, store them securely and load them up when they’re being collected. Most depots would be loathe to pay for the cost of any delays due to mechanical or other failures within the depot. Although the customer is likely to raise the matter with the depot and try to recoup some of the cost occurred, he is unlikely to be successful. That’s just one of the tough realities of dealing with freight. Nobody is willing to shoulder the blame.