April 1st in 3PL by .

Detention Vs Demurrage

Here comes one of all time debated topic, Detention Vs Demurrage charges. First, I will explain the definitions and than will move on to actual difference. Every person within shipping industry goes through this confusion at least once, “oh is it detention or demurrage charges.” While I was working in one of the 3pl, I had the same confusion, for sometime I thought both are same but different names but later one of my ocean expert team member  explained it to me. After …

Here comes one of all time debated topic, Detention Vs Demurrage charges. First, I will explain the definitions and than will move on to actual difference. Every person within shipping industry goes through this confusion at least once, “oh is it detention or demurrage charges.” While I was working in one of the 3pl, I had the same confusion, for sometime I thought both are same but different names but later one of my ocean expert team member  explained it to me. After I realized how each terms are different from one another, have noticed that lot of people use the term interchangeably.  It’s true that detention and demurrage charges are related to storage, but one needs to understand that both terms represent TWO different areas of shipping charges.

For Imports, Demurrage Charges: In simple words, demurrage is charged immediately after 7 free days (it depends on the port) after shipment has arrived at the destination port, and if the consignee fails to take delivery of the container within those 7 days than starting from the 8th day the shipping line will charge certain amount each day until the container sits at the liners storage, and this is what is called as Demurrage charges. Demurrage charges varies from liner to liner. Now, after taking a delivery of the container, and let say if the consignee takes 8 to 10 days to return the empty container to the shipping lines nominated depot, than the lines levy certain fee, for each day until the empty container is returned, that is nothing but  Detention charges.

For Export, usually, the shipping lines give 4 to 5 free days, but it again depends on the port and liner, so within these 5days it is shipper’s responsibility to pick up the empty container, pack it and return it full to the the port, if this process causes any delay than the assigned free days the line will charge Detention fee. After packing the container and for some reason if shipper is unable to ship, then the Demurrage fee will be levied, until the container is shipped out. Again, these charges depends on port to port. Hope I did not confuse you, if you have any question please feel free to write to me.

 

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