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Operations & Capacity3 min read

Port Strikes and Congestion: Following the Demurrage to the Weakest Counterparty

Strikes end. The backlogs they create do not end with them, and neither do the charges. Demurrage and detention accumulate daily while the parties argue about who is contractually responsible, and that argument is settled slowest by the party least able to fund it.

The backlog outlasts the stoppage by a multiple

A 48-hour strike does not cost 48 hours. ECT Rotterdam indicated it would take at least several days to clear the resulting container backlog, and that is before the compounding effect of vessels arriving on their original schedules into a terminal that is behind.

Northern European gateways were already operating at high utilisation with little flexibility to absorb additional disruption. A stoppage into a constrained network does not produce a delay proportional to its length. It produces a queue, and queues clear slowly.

Demurrage is a daily meter

Demurrage and detention charges are the clearest example in shipping of a cost that starts small and becomes serious quickly. They accrue per container per day, they do not stop while a dispute is pending, and they frequently exceed the value of the underlying service.

The contractual question of who absorbs them — carrier, forwarder, shipper, receiver — is rarely resolved cleanly when the cause is industrial action or congestion rather than a party's own delay. Force majeure provisions vary. Free time allowances vary. Practice varies by terminal.

While that is litigated or negotiated, the charges sit somewhere. They sit with whoever has the least contractual leverage, which is usually the smallest party in the chain.

This is the part that matters for a credit book. A large carrier or a well-capitalised forwarder absorbs an unexpected six-figure demurrage bill and files it under cost of doing business. A small forwarder, a regional trucking operator or a mid-size trader does not.

What that party does instead is stretch its other payables. It pays its bunker supplier later. It pays its port agent later. It negotiates on an invoice it would previously have settled without comment.

Those are the first observable symptoms, and they appear on counterparties that are not obviously connected to the strike at all. The stress transmits through the chain rather than staying with the parties directly affected.

What granular visibility changes

Aggregate congestion statistics tell you a port is slow. They do not tell you which of your counterparties has forty containers sitting past free time in it.

Vessel-level and counterparty-level dwell data closes that gap. It identifies which specific parties are accumulating congestion cost, how much, and for how long — which is the difference between knowing there is a problem in Rotterdam and knowing which three names in the book are carrying it.

What CERTY does about this

Granular, vessel-level visibility into dwell times and port status flags which specific counterparties are absorbing the most congestion cost. Because that data feeds the same behavioural scoring as payment activity, the resulting payment stretch is visible as it develops rather than at the next reporting cycle.

FAQ

Frequently Asked Questions

  • How long do port strike backlogs take to clear?

    Substantially longer than the stoppage itself. Terminal operators at Rotterdam indicated several days to clear backlogs from a single-day action, and clearance is slower where the port was already operating near capacity before the strike.

  • Who pays demurrage during a port strike?

    It depends on the contract, the terminal's free time policy and whether industrial action triggers relief provisions. In practice the charge often lands on the party with the least contractual leverage, which is frequently the smallest operator in the chain.

  • How does port congestion show up in counterparty credit risk?

    As payment stretching on unrelated invoices. A counterparty absorbing unexpected demurrage typically delays other payables first, so the earliest signal appears on routine invoices rather than in any congestion-related dispute.

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Portrait of Vlad OliinykVO
Written by

Vlad Oliinyk

Co-Founder & Chief Product Officer

Vlad is a technology and finance executive who has spent his career turning complex data into decision-grade intelligence. As CPO and Co-Founder of Twistr, he helped raise $3 million across three funding rounds and secured partnerships with Google before a successful exit. He has also advised leading VC and private-equity funds, including Agartha, AG Invest, and SCM, on due diligence and risk strategy, identifying five unicorn investments along the way. At CERTY, Vlad leads product, applying his background in AI, machine vision, and financial modelling to build the platform’s instant credit-scoring engine for shipowners and operators.

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