Industry
Port strike contingency plans: the customs bond and demurrage traps
US importers must manage customs bond renewal, demurrage accrual, and force majeure gaps before a port strike. A five day drill exposes cash and legal traps.
What to take away
- Customs bondverify the continuous bond amount (minimum $50,000) and expiration date at least 90 days before a strike.
- Demurrage and detentionfree time usually runs 3 to 7 days, then per diem charges start; track container status daily.
- Force majeurecheck the clause wording; the BIMCO 2020 clause requires notice and lists strikes as a trigger.
- Checklistbond, contracts, cash, evidence.
Customs bond timing before a strike
A continuous customs bond must be renewed annually. If your bond expires during a strike, CBP may not process a new one quickly. CBP Form 301 is the bond application. Check bond sufficiency.
Customs Bond Renewal Timeline
- 90 days outStart renewal
- Before strikeFile CBP Form 301
- Strike windowBond may expire
- 10 day extensionEntry summary only
If your duties, taxes, and fees are rising, CBP can demand a higher bond amount. The minimum continuous bond is $50,000. For high volume importers, CBP may require 10 percent of estimated annual duties. Start renewal 90 days out.
If the bond is expiring, file the renewal before the strike window. CBP can grant a 10 day extension for entry summary filing under 19 CFR 142.12 when a port is closed. That extension does not extend the bond. A single entry bond costs more per shipment. Keep a spreadsheet of bond numbers and expiration dates.
Demurrage and detention accrual mechanics
Demurrage applies when a container sits at the terminal beyond free time. Detention applies when the container is off terminal but not returned. Free time at major ports like Los Angeles and Long Beach often runs three to seven calendar days.
Demurrage Per Diem Rates
- $100Typical low
- $300Typical high
After that, per diem charges start. Rates vary by carrier and port. A typical charge is $100 to $300 per container per day, rising over time. The practical detail is set out in How to Build an Operational Risk.
The Federal Maritime Commission (FMC) interpretative rule on demurrage and detention (46 CFR 545) says charges must serve their incentive purpose. If a port is closed because of a strike, you can argue the charges are unjust. Keep timestamped evidence of terminal closures and appointment failures. The FMC billing rule requires carriers to issue invoices within 30 days.
Force majeure wording in freight contracts
A force majeure clause excuses performance when an unforeseen event prevents it. The BIMCO Force Majeure Clause 2020 lists strikes, lockouts, and port closures. It requires the affected party to give notice within a set period, often five days. If your contract lacks a force majeure clause, common law may not protect you. Review your service contract.
The clause should state whether demurrage and detention are excused. Many contracts say force majeure does not excuse payment of freight or charges. Push for language that suspends per diem during a documented port closure.
The FMC does not mandate a force majeure clause, but it reviews unfair terms. For a strike drill, see our port strike contingency planning drill for the operational rehearsal.
US importer contingency planning checklist
- Confirm continuous bond amount and expiration date; file CBP Form 301 renewal 90 days before strike.
- Map free time for each carrier and terminal; set calendar alerts at day 1, 3, and 5.
- Pull your freight contracts and highlight force majeure notice periods and demurrage exceptions.
- Pre-authorize a cash reserve for per diem charges; estimate 10 days of demurrage per container.
- Build an evidence packterminal closure notices, appointment screenshots, and email timestamps.
Use a structured risk assessment method, such as the NIST Cybersecurity Framework, to prioritize which contingency gaps get funding first.
Example: five day bond and demurrage drill
On day one, check bond expiration. On day two, calculate free time for each container. On day three, simulate a force majeure notice to your carrier. On day four, tally per diem exposure at $200 per container per day. On day five, brief the CFO with the evidence pack and the cash number.
This drill tests the money and legal side, not the physical move. Use a risk matrix to score each scenario. Plot likelihood on one axis and cost on the other. The risk matrix shows which traps deserve cash reserves first.
Recency bias can distort your likelihood estimates, a known effect in risk assessment.
