What is the Last Free Day in Shipping?
The Last Free Day is a the last day of free time offered by a logistics partner for using equipment or space. Each party offers a different set of free time to a cargo’s consignee.
A port’s Last Free Day is a cargo consignee’s grace period to store a container inside port, before incurring port storage fees. Think of this as renting storage thereafter.
A carrier’s Last Free Day is also a cargo consignee’s grace period to use a shipping container, before incurring demurrage fees. Think of this as renting equipment thereafter.
When is the Last Free Day at Port?
Last Free Day’s vary between different logistics partners in your supply chain. Sea ports, air ports, rail yards, and container freight stations all offer different timelines to the amount of time they offer for storage. A good freight forwarder knows how much time is available at each stage.
LFD For Full Container Loads (FCL):
The port terminal provides 5 business days, on average, of storage time. This varies between terminals.
LFD Time For Less than Container Loads (LCL):
A Container Freight Station provides 7 days of free time to cargo consignees after a container is stripped.
LFD Time by Air
Air – Airline terminals normally allow 2-3 days of storage time.
LFD Time by Rail
Rail – The rail yards normally allow about 2 days of storage time.
When is the Last Free Day with a Carrier?
Free time offered by a carrier vs a port differs. A shipping carrier can offer 3-7 days of time to use their shipping container. This is time to use their equipment (i.e. their container) – not time to use a port’s space.
The Last Free Day is the point at which that grace period to use equipment, provided by a carrier, expires. The carrier charges Demurrage thereafter. Demurrage is a punitive fee for letting containers languish inside the port beyond their allotted time from the carrier.
The risk of demurrage applies to both imports and exports.
Demurrage with Imports
Occurs when containers are not picked up from port, after arrival to the port yard.
Demurrage with Exports
Occurs if an exporter delivers the goods to port before a dispatch date is agreed upon.
Do Customs Inspections Use My Free Time?
Yes, absolutely. It is important to be on time and be prepared with the correct paper work. Proper documentation helps move cargo from point a to point b.
Customs inspections can exhaust free time from your carrier and separately, container freight station. CBP requires certain documents and needs time to verify the origin of goods. That time is charged by the carrier and CFS. It is important, that the details on the customs documents match with the details on the commercial invoice along with the customs clearance documents. To learn more, read up on 6 Tips to Avoid Demurrage and Per Diem Detention Charges.
Do I Need to Know My Last Free Day?
No, your freight forwarder team will dispatch the trucker to pick up the cargo within the allotted free time offer by both the carrier and port. A good freight forwarder ensures the cargo are moved from the port yard right away. If the shipping carrier will not release the cargo to the freight forwarder for contractual disputes your team may arrange a pre-pull to the trucker’s yard. Once resolved and the cargo is released from carrier to freight forwarder, the freight forwarder coordinates container delivery to a container freight station or bonded warehouse to complete customs clearance. Here, the clock for a new set of free time begins with the CFS.
Again, you pay your freight forwarder to know the Last Free Day and how to navigate your cargo’s container to its final 3PL warehouse. In other words, you choose your own level of involvement with your freight forwarder. However, they are paid to know the different sets of free time offered by different logistics partners.