Service Level Agreement
Meaning ~ A binding contractual addendum establishes quantifiable performance standards and financial remedies for supplier failures in commercial sourcing and logistics.
Terminal Free Time
Meaning
Time allowances provided by a port facility or carrier for the storage of a container before storage charges begin to accrue facilitate cargo movement. Utilizing terminal free time gives the importer enough time to arrange for the pickup and transport of the goods. This period ends once the container is moved or the agreed duration passes.
~
Storage Window
The duration of this period varies by port and by the type of cargo being moved. Terminal free time for refrigerated units is usually shorter than for dry containers due to the need for power and monitoring. ~
Demurrage Penalty
Once the terminal free time expires, the facility begins to charge a daily fee for the use of the space. These rates often increase every day the container remains in the yard to encourage rapid removal. Large importers negotiate for longer periods to accommodate their complex distribution schedules.
~
Extension Clause
Specific agreements can be made to increase the number of days allowed under certain conditions. When a port is congested or a rail link is broken, the carrier may grant additional terminal free time as a gesture of goodwill. Clear documentation of these exceptions is necessary to prevent disputes during the final billing process.
This allowance is a major factor in total landed cost.