Dwell time can lead to unnecessary spends that drive up total logistics costs, and you can’t always pass that on to clients without the risk of losing sales.
The easiest way to reduce dwell time & maximize profit is more informed planning & management — easier now through live container GPS tracking.
What is Dwell Time?
Dwell time is the time that cargo containers spend within temporary storage facilities in transit, especially at waypoints for intermodal transportation like shipping ports or container storage yards.
It can be divided into three stages:
- Entry — Which involves unloading the container from its transport (ship, rail, or trailer) and transferring it to a storage yard.
- Storage — Which involves holding the container until paperwork catches up, import duties and other charges are settled, and customs gives its clearance.
- Exit — Which involves securing further transport for the container, loading, and any exit formalities before the container is cleared for release.
Long dwell times don’t just have a negative impact on container terminal operations, the inefficiency cascades down the line, contributing to inflated storage fees, greater inventory holding costs, tied up working capital, and an inability to set up reliable Just-in-Time (JIT) procurement and manufacturing operations for importers.
Why is Container Dwell Time Usually Elevated?
Container dwell time in storage yards or ports is an old but persistent operational issue for global logistics operations.
Dwell times vary from facility to facility, and so do the factors that lead to them. Most issues, however, usually boil down to one or more of the following reasons:
- Paperwork & Container Transfer
It can take a while to complete processes to secure clearance for imported containers, arrange for customs dues and clearance charges, and complete an intermodal transfer. Additional time is required for container ports with inland container depots or “off dock” container storage yards (referred to as ODCYs) to transfer containers from a port to the secondary storage yard.
- The Cost of Release — Customs & Clearance Charges
Container dwell time is sometimes due to issues with liquidity.
Shippers are often short of cash, and they tend to reduce financial exposure as much as they can, paying customs and clearance fees only after they’ve secured a buyer for their cargo, or borrowing capital only when necessary, usually after a container arrives.
Shippers are willing to leave cargo containers in terminals or off dock container yards if they can’t pay all port clearance charges and fees in advance.
- Lower Storage Costs at Ports or Terminals
Several docks and container terminals offer a “free time” for storage, usually between 3 – 15 days, depending on the facility’s congestion and usual throughput, and shippers take full advantage of this free time.
Even after the free time expires, storage, demurrage, and congestion fees levied can still be far lower than the cost of transferring and storing containers at private or third-party container storage facilities. The lower overall cost for storage is a compelling incentive to use ports or container terminals as cheaper storage to lower total logistics costs.
- Accounting for Inefficiency
Shippers expect inevitable delays, and there’s usually a healthy amount of buffer time accounted for between expected and actual delivery.
If a container arrives earlier than expected, pick-up may be delayed until it’s needed, which usually depends on a consignee’s manufacturing schedule, inventory management strategy, or product distribution plan.
Given the pace at which global commerce is growing, especially the increase in containerized temperature-controlled transport of FMCG as well as food & beverage products, container dwell time will be a crucial factor in port selection.
Although shippers tend to favor major ports with low dwell time — but higher processing and storage fees — they’re likely to look for alternatives closer to their market opportunities.
The only thing stopping them from adopting a bolder supply chain strategy, one that doesn’t favor reliability over minimizing total logistics cost, is a lack of situational awareness.
If they had a better idea of the total logistics costs associated with long container dwell times, exactly where their cargo containers are, and when to expect them, it’d be easier to manage operations while minimizing both cost and uncertainty.
That’s where GPS container tracking can help.
How to Reduce Dwell Time with GPS Container Tracking
There are several shipment and cargo container tracking solutions available that can address the visibility gap in multimodal cargo container movement.
Portable, wire-free, discreet, battery-powered tracking devices can help track goods from the moment they’re loaded onto a container, right up until they’re dropped off at the consignee.
They’re easy to set up and use, rely on a combination of GPS+GSM tracking to monitor container movement over road and rail, and can plug in data from a cargo ship’s satellite tracking system to offer coverage over ocean routes, where GPS/GSM tracking may not always be effective or reliable.
There are two available options, depending on exactly what you need to track.
- For full container load (FCL) tracking, you can adhere a GPS tracking device to the side of shipping container using magnets or bolts. There’s also the option of GPS enabled container padlocks that work much in the same way as an attached tracker, with the added advantage of remote locking/unlocking and access tracking for added container security.
- For less than container load (LCL) tracking, you simply place the GPS device within the shipment, or track goods with a GPS tracker attached to reusable shipping assets like pallets, bins, or cages. Coupled with short range radio identification tags (using technologies like BLE) to tag individual items in an LCL shipment, these trackers can also help secure cargo by flagging missing inventory due to inadvertent/unauthorized removal or outright theft.
GPS tracking devices like these can give you live updates on the location and movement of containerized goods, which if used correctly, can help:
- Determine whether containers have been loaded/unloaded properly, which helps avoid delays and reshipping costs, besides allowing you to get by on leaner safety stocks.
- Monitor accurate dwell time at ports or terminals, allowing you to plan pickup schedules that take advantage of “free time” storage without overstaying your welcome, thus avoiding extra holding or demurrage charges.
- Measure actual dwell time at terminals, which can help contest unfair or unreasonable charges that are often levied because there’s little data to back up your version of the truth.
- Give you updates and accurate ETAs for arrival, which help you plan ahead for paperwork, pick up, and provisions for capital expenses like customs and clearance fees.
- When you know when goods are arriving, it’ll also help to better plan downstream processes like sales and distribution based on your in-transit inventory, allowing you to offload cargo quicker and liquidate working capital faster.
An added advantage of tracking is the ability to determine responsibility in case of damage (some trackers have embedded sensors) or theft, which could help reduce unnecessary insurance claims, and perhaps your insurance premiums.
Accurate alerts and live information about movement, delays, or even disruptions allows you to take steps to minimize negative impact well in advance, keeping your supply chain moving and meeting increasingly aggressive customer service expectations.
If you think container tracking isn’t worth the expense, try weighing it against what you lose when cargo gets late, lost, or left behind.
If you still think you’re running a pretty watertight operation, factor in the cost of handling exceptions, holding buffer inventory, or expedited shipping, and maybe even toss in the cost of lost customer relationships because you dropped the ball just that once.
GPS tracking doesn’t just give shippers a better idea of the additional costs endured due to high container dwell time, it also gives them a means to reduce it and run a more stable supply chain.