CPIM Practice Exam

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What are demurrage charges related to?

Delays caused by adverse weather
Freight cars and ships retained beyond specified time
Overloaded shipping containers
Insurance fees during shipping

The correct answer is: Freight cars and ships retained beyond specified time

Demurrage charges specifically relate to the fees incurred when freight cars, ships, or containers are held beyond the agreed-upon time for loading or unloading. These charges are intended to encourage timely movement of cargo and to compensate the carrier for the extra time the transport vehicles are being used, often resulting in a financial loss due to operational delays. When freight transportation experiences delays, encouraging prompt handling of cargo becomes essential for maintaining efficient supply chain operations. Demurrage serves as a financial disincentive for parties who may otherwise delay unloading or loading processes, ensuring that shipping schedules remain on track.