Free Time
Free time refers to the period granted by carriers or terminal operators during which a container can be stored or used without incurring demurrage or detention charges. It applies both at ports (demurrage) and outside terminals (detention) and is a crucial cost factor in freight management. ERP systems help logistics teams track free time windows, trigger alerts, and manage exceptions to avoid unnecessary charges.
How Free Time Works in Logistics?
Once a container is discharged at the port or picked up from the terminal, the ERP system starts counting the free period based on carrier agreements. These terms, typically ranging from 3 to 7 days, are stored in the shipment job file. The system tracks key milestones like gate-in and delivery, then alerts operations teams before free time expires to help prevent fees and ensure timely planning.
Impact Across Logistics Functions
Sales and Customer Service
Sales teams use free time data to advise clients on how long they have before charges apply. Customer service can proactively notify customers when their container is nearing its free time limit.
Operations Management
Operations teams rely on ERP alerts to manage container pickup, return, and movement schedules. Real-time tracking helps reduce the risk of detention or demurrage due to missed deadlines.
Documentation and Compliance
Free time tracking helps ensure documents like delivery orders and container release forms are processed promptly. Delays in paperwork can directly impact cost exposure.
Finance and Billing
If free time is exceeded, the ERP logs related charges, calculates detention or demurrage fees, and includes them in the billing section. Finance teams can track these costs for reconciliation and dispute resolution.
Management and Analytics
Managers analyze free time trends across carriers, ports, and clients. This insight helps identify where delays occur most often and supports renegotiation of terms or operational improvements.
Conclusion
Free time tracking is vital for cost control in containerized shipping. By monitoring and alerting teams before detention or demurrage charges apply, ERP systems help forwarders reduce avoidable expenses and improve planning. In high-volume logistics, managing free time efficiently contributes to both profitability and customer satisfaction.