What Causes Long Port Dwell Time & How to Optimize It

Operational efficiency is one of the factors that determine a company's success in managing the distribution of goods. A distribution process that runs on time can help reduce costs while maintaining the smooth flow of the supply chain.

To achieve optimal distribution, you need to understand logistics port dwell time and its connection to the cargodoring process at the port. Check out the explanation below to learn about the causes, impacts, and strategies to optimize it.

Why Can Long Logistics Port Dwell Time Happen?

Before understanding the causes, you first need to know what dwell time is in logistics. Dwell time is the duration a container stays at a port terminal starting from the moment it is unloaded from the ship until it leaves for the warehouse or its final destination.

During this period, the container goes through several stages, from loading and unloading, document and customs checks, to the release of goods from the terminal.

In logistics operations, dwell time is an important indicator for measuring port efficiency and the smoothness of the supply chain. The shorter the dwell time, the faster goods can be distributed to their destination, which helps reduce logistics costs.

Dwell time is influenced by various factors, both internal company processes and port operations. Here are some of the most common causes:

Slow administrative and customs processes.
Import or export documents are incomplete or incorrect.
Physical inspection of goods by authorities takes more time.
High container volumes lead to congestion at the port terminal.
Limited port infrastructure capacity, such as loading/unloading equipment and stacking areas.
Operational disruptions due to extreme weather or force majeure conditions.
Limited land transportation fleet to move containers out of the port.
Less-than-optimal coordination between shipping companies, terminal operators, logistics companies, and cargo owners.
Use of digital systems and data exchange that are not fully integrated slows down operational processes.

Stages in the Dwell Time Process

Every container that arrives at the port cannot be distributed to its destination immediately. Before leaving the terminal, containers must go through three stages in the dwell time process, namely pre-clearance, customs clearance, and post-clearance. Here is the explanation:

1. Pre-clearance

Pre-clearance is the stage from when a container is unloaded from the ship until the importer or designated party submits the customs documents to the relevant authorities.

At the pre-clearance stage, companies need to prepare various import documents, such as the goods import notification, invoice, packing list, and other supporting documents.

If the documents are incomplete or there are administrative errors, the next process may be delayed, causing the overall dwell time to be longer.

2. Customs Clearance

After going through the pre-clearance stage, the container will enter the customs clearance process, which involves inspection and the fulfillment of customs obligations by the customs authorities.

At this stage, officers will verify the documents, conduct a physical inspection of the goods if needed, and ensure that all obligations, such as import duties and taxes, have been met in accordance with applicable regulations.

3. Post-clearance

Post-clearance is the stage after the issuance of the Release Order (RO) until the container exits (gate out) the port terminal. At this stage, the container will be taken from the terminal and transported by truck to a warehouse, factory, or the destination location.

Even though the customs approval has been obtained, the container does not necessarily leave the terminal immediately. Logistics transportation limitations, vehicle queues at the port, or a lack of coordination between the goods owner, logistics company, and port operator can cause delays in container pickup. As a result, dwell time becomes longer, and the company's logistics costs increase.

What Happens If Dwell Time Is Too Long?

Dwell time that exceeds the ideal duration can slow down the flow of goods and reduce the company's operational efficiency. Here are some impacts that might occur due to overly long dwell time:

Increased logistics costs: The longer containers stay at the terminal, the higher the costs the company has to bear, such as stacking fees, demurrage (charges applied when containers stay at the terminal beyond the free time), and detention (fees for late return of empty containers to the shipping company).
Delayed goods distribution: Late container release from the port pushes delivery schedules to warehouses, factories, or customers back. This can disrupt smooth distribution activities.
Port productivity goes down: Containers piling up for too long reduce the terminal's capacity to receive and handle new containers, making loading and unloading processes less efficient.
Risk of project or production delays increases: For the manufacturing, energy, construction, and process industries, delays in the arrival of materials or equipment can hold up project schedules and lower operational productivity.
Company cash flow gets disrupted: Higher logistics costs and delayed distribution of goods can affect the company's cash flow, especially if working capital is tied up to cover unexpected operational expenses.

Strategy to Optimize Dwell Time

To reduce dwell time, good coordination is needed between cargo owners, logistics service providers, port operators, and customs authorities. Here are some strategies that parties involved can apply to speed up the flow of goods while also improving operational efficiency:

1. Prepare Documents Before Arriving at the Port

Cargo owners or appointed parties, such as Customs Service Handling Companies (PPJK), need to ensure that all import and export documents are complete and comply with regulations before containers arrive at the port. This step helps reduce potential delays due to administrative errors or incomplete documents.

2. Setting Up a Scheduling System

In addition to documents, cargo owners, logistics providers, and port operators can also arrange schedules for container pickup, fleet availability, and planned goods distribution. With good scheduling, containers can leave the terminal quickly without having to wait too long at the port.

3. Submitting Customs Clearance as Quickly as Possible

Another important factor in dwell time is submitting customs clearance, which needs to be done by the cargo owner or the Customs Brokerage. Customs clearance should be processed as soon as possible so that document verification and customs inspection can start earlier. This way, containers can get permission to leave the terminal as soon as all requirements are met.

4. Implementing Digitalization and Automation

Port operators and logistics service providers can use digital systems to manage documents, track container positions in real-time, and speed up data exchange with all parties involved in the logistics process.

With digitalization and automation, administrative processes become faster, the risk of data entry errors can be minimized, and operational decision-making becomes more efficient.

5. Improving Dock Management Optimization

For port operators, operational efficiency at the dock also plays an important role in reducing dwell time. Managing terminal capacity, regulating vehicle flow, and making optimal use of loading and unloading equipment can speed up the movement of containers from the ship out of the port.

Integrated and Reliable Chemical Logistics Solutions from CDI

Effectively managing logistics port dwell time requires support from experienced logistics partners that offer integrated services, from transportation and warehousing to customs handling.

With a well-coordinated logistics system, companies can speed up the movement of goods, reduce potential delays, and maintain supply chain efficiency to keep business operations running smoothly.

To meet these needs, PT Chandra Daya Investasi Tbk (CDI) provides land and marine logistics solutions through its subsidiary network.

For sea logistics needs, PT Chandra Shipping International (CSI), a subsidiary of CDI, operates over 10 LPG and chemical carrier ships with capacities of around 4,200–9,600 DWT, allowing it to safely support your goods distribution.

Meanwhile, in the land logistics sector, PT SCG Barito Logistics (SBL) offers inter-island transportation, sea freight, export-import services, customs handling, and warehouse management with the support of over 200 truck units.

For storage needs, PT Chandra Cold Chain (CCC) is equipped with modern cold storage facilities with a capacity of more than 700 pallet positions, while PT Chandra Warehouse Cilegon (CWC) manages a 51K+ m² warehouse area in Cilegon to support the storage needs of various types of industrial goods.

CDI is ready to be #YourGrowthPartner in building a more efficient, reliable, and sustainable supply chain. With an integrated logistics network and adequate infrastructure, trust CDI with your company's logistics needs.