Usually, demurrage has to be paid before the cargo is picked up from the port. Now, the shipping line will charge you demurrage until your container is picked up and gated from the terminal. As a result, your cargo container is stuck at the port beyond free days. But the congestion on the roads to the port has delayed your truck from reaching the port in time. Let’s picture this: Your container has been unloaded at the Port of Los Angeles. Hence, we want to give you a thorough understanding of both journeys so you make an informed decision for your next shipment. Here’s how: Demurrage and detention charges during import and exportĪs you can see from the image above you will come across demurrage and detention in both export and import activities. In fact, you’re likely to experience demurrage and detention during both import and export. Unfortunately, such delays are very common. A detention charge comes into play if the container isn’t returned empty to the shipping line within the free days. While a detention charge is levied for the delayed use of the container outside a terminal. A demurrage charge comes into play if the full container isn’t moved out of the terminal to be unpacked within the free days. You pay a demurrage charge for the delayed use of the container within a terminal. But the difference between the two charges depends on the location of the containers at the time of the delay. It’s true that conceptually both are essentially ‘late fines’ for the return of containers. Most people confuse demurrage and detention fees to mean the same. Container detention vs container demurrage Now that you have this information in your back pocket, let’s move ahead to deciphering the differences between demurrage and detention for better clarity. Working as an incentive for the customers to return empty containers and have a fast turnaround.Compensating the shipping line for the use of its container.In principle, demurrage and detention have two main purposes: These charges are usually calculated on a per-day basis. If you fail to return these containers within the free days, the shipping lines start charging late fees called demurrage and detention. In conventional shipping, the free days are often somewhere between 3-5 days after the container has been discharged from the vessel. The free days determine the number of days a shipper can use the container for free. These containers are called carrier-owned containers (COCs).įor shipping lines to turn around their containers, shippers need to return these COCs within a stipulated time called ‘free days’. We know shipping lines provide containers to their customers for door-to-door transportation of their goods. What are demurrage and detention in shipping?
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