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February 20, 2023

By Lori Ann LaRocco

ITS Logistics is warning of exploding per diem charges in the second and third quarters. It is seeing more items being held in ocean containers on chassis. While some say only truckers pay per diem, that is not entirely true. Shippers can pay per diem.

“On the surface, in a lot of cases, it is dependent on the contract the BCO/shipper has with the NVO/ocean carrier,” explained Paul Brashier, vice president of drayage and intermodal at ITS Logistics. “If that contract bills these charges to the trucker, the trucker outlays and then bills back to the BCO/shipper. If the contract bills these charges to the shipper/BCO, the trucker does not have to outlay and those charges go directly to the shipper/BCO.”

Brashier continued, “Regardless, shippers pay these fees. In some cases, if the MSA between the shipper/BCO and the trucker has a clause for negligence, the trucker could be on the hook if they did not pull a container from the terminal in time or terminate an empty quickly. If the trucker’s operations are on point, this is very rare and usually happens less than 1% of the time.”

Simply put, per diem rates are passed onto the consumer, which stokes inflation. It’s another cost that the Fed has no control over.

Read the full article here.