Demurrage Transaction Charges

Demurrage charges are time based charges for extended use of assets. The chargeable days are determined based on specialized demurrages rules for each carrier. The type of equipment, commodity, consignee and location are used to interpret the debit and credits days for each demurrage transaction. Per diem rates that typically qualifier by carrier, car type, private or railroad, commodity etc are applied on each of the extended use days (chargeable days) on each demurrage transaction. Also, in some cases, different charges are used for excess days that start after a certain number of days, maybe 4, etc (marginal rating). The per diem rates capability is already available within OTM rating structure and hence the demurrage charges will be modeled using OTM rating.

Following are some possible scenarios with different demurrage start and stop events (status codes), and different assets

Scenarios

Scenario – 1 Freight Car – Railroad (RR) Controlled

Demurrage Type Charge Days are applicable. Demurrage type dwell day’s determination starts with earliest of constructive placement or actual placement and end with Release event. There are the charges that are settled outside of OTM. This would need a demurrage settlement report that will be used to compare manually with actual demurrage bill sent by carrier to determine the deviation if any before releasing the payment.

Scenario – 2 Freight Car – Private (PVT) Controlled

Storage Type Charge Days are applicable. Storage is applicable for PVT controlled freight cars that are stored on railroad property. Typical dwell day’s determination starts with constructive placement and end with Ordered-In event. These storage charges are settled like demurrage charges in scenario 1.

Scenario – 3 Intermodal Cars

Both Detention and Storage Type Charge Days are applicable. Storage type dwell days determination starts with Notification and end with Out-Gate event. These are the charges accrued at the ramp only. Detention type dwell days determination starts with Out-Gate and ends with In-Gate event for the use of Intermodal Trailer or Container. There are two types of charges and each can be modeled to be settled differently.

In the above scenarios, the demurrage transaction chargeable days are charged by the carrier to shipper or consignee. In OTM, for the above scenarios, the demurrage transaction charges can be captures as an NFRC shipment or can be settled with normal transportation cost.

Scenario – 4 Freight Cars – PVT Car - Shipper Controlled

Detention type charge days are applicable; Shipper charges for the excess time of car usage for unloading at the consignee location. Time and charges typically vary by customer, equipment/car and product. Detention type dwell day's determination starts with earliest of constructive placement or actual placement and end with Release event. These are the charges that are charged by shipper to the consignee and hence would result in sell NFRC shipment.

Scenario – 5 Freight Cars – PVT Car – 3PL Controlled

Detention type charge days are applicable; 3PL charges for the excess time of car usage for loading at shipper location or unloading at the consignee location. Time and charges typically vary by customer/shipper, equipment/car and product. Detention type dwell day's determination starts with earliest of constructive placement or actual placement and ends with release event. These are the charges charged by 3PL to the shipper/consignee and hence would result in sell NFRC shipment.

Chargeable Days

The debit and credit chargeable days and charges are represented in OTM using the special services. Each special service must be linked to an activity type. Each demurrage transaction represents either an empty to load, load to empty, empty to empty, or load to load activity type. Depending on your scenario, you may need to define two special services for the same activity type. See below for an example.

Activity Type	Special Service
Load-Load	Storage
Load-Load	Detention
Load-Empty	Storage
Load-Empty	Detention
Load-Empty	Demurrage

The calculation of debit and credit day's process works based on the demurrage transaction activity types. The demurrage transaction activity type, carrier, type of equipment, commodity and location will be used to interpret the applicable chargeable days (special services and activity type).

Charges

Modeling of charges is done using shipment special services (for example, Storage – Load –Load or Detention Load- Load) either at the rate offering or rate record based on the need. Each special service will be linked to accessorial code and accessorial cost ID. The accessorial cost (marginal rates) will be defined using the RBI "shipment special service duration". The special service duration will be mapped with chargeable days for a particular chargeable day's special service.

Setup Steps

1. Use the existing available activity types or define a new activity type as needed to represent demurrage transaction activities.
2. Use the existing available special service or define new special services to represent the type of demurrage (demurrage, detention, storage etc) charges.
3. Define demurrage rates using the existing rating structure (rate offering of type Demurrage, Rate Offering, Rate Record, Marginal Rating, etc).
4. Define the parameter "Find Demurrage Rule Set" to the domain level.
5. Define demurrage rules using the above defined special services and activity types and link OTM rating structure to the demurrage rule. Also, specify how the settlement will be done as part of the detail rule definition. Following options are available:
   1. Settlement is done as a separate process (not settled along with the transportation costs). Each demurrage charge is managed as non freight related charges OTM Shipment,
   2. Settlement of demurrage charges are done along with the transportation charges. In this case, your will have to select "Settle along with Inbound/Outbound Shipment" on the demurrage rule detail and
   3. Settlement between 3PL and shipper/consignee is managed as secondary charge shipment generated based on secondary charge rule specified on demurrage rule detail.

Processing Steps

1. Once the demurrage transaction is saved (with demurrage transaction end event), trigger the calculation of charges process (using web, agent or process). This sub-process applies the demurrage rules for each demurrage transaction and determines the chargeable days, charge information and saves the information as demurrage transaction line items for each type of demurrage charge (special services).
2. You can run the calculation of charges for demurrage transactions that have not yet reported an end event (presented as status code). This scenario is applicable when running demurrage liability reporting.
3. Using Demurrage Transaction Manager, you can query and view the chargeable day's information and if needed the calculated chargeable days can be modified to capture the special credit days provided by the carriers.
4. You can use the change external status action to either approve the charges or put the charges on hold in-case of disputes for each demurrage transaction.