What is demurrage and detention in shipping?
Demurrage refers to the charge that the merchant pays for the use of the container within the terminal beyond the free time period. Detention refers to the charge that the merchant pays for the use of the container outside of the terminal or depot, beyond the free time period.
How much is demurrage per day?
Demurrage amounts may differ based on terminal or carrier and often increase after an initial period of time. Daily demurrage charges can typically range from $75 to $150 per container per day, but that’s just for the first 5 days or so. Charges generally increase the longer the cargo stays on the terminal.
What is the difference between container detention and demurrage?
Demurrage is charged by the shipping line per day per container from the date of discharge till the full container is moved out of the port or terminal for unpacking. Detention is charged per day per container from that time till the empty container is returned to the shipping line’s nominated depot.
What are detention charges in freight?
These charges cover the usage of storage space occupied by the container on terminal grounds, inside a warehouse or at the container yard.
Who is responsible for paying demurrage charges?
The shipper is generally responsible for demurrage charges, but the consignee also may be legally obligated to pay, depending upon who was at fault for the delay and which party was contractually responsible to pay freight or other charges.
How is demurrage calculated?
How are demurrage charges calculated? In the calculation of Demurrage charges to the shipowner/port authority, the demurrage rate is multiplied by the number of days/part days over the agreed free days.
Who is liable to pay demurrage charges?
What is free time demurrage and detention?
In order to avoid demurrage and detention charges, import and export shipments must be handled within a specified grace period, referred to as free time. Free time is the period of time during which no demurrage or detention charges will apply for the use of a container, in addition to basic freight costs.
How can you avoid paying demurrage and detention charges?
Tips to Avoid Demurrage Charges
Pre-clear the cargo by submitting the shipping documents as soon as possible. Align the business with multiple trucking options, so if one trucker falls off the load another one can be found quickly to recover and not incur charges.
Who pays detention and demurrage?
sea freight forwarders
Demurrage and detention charges during import
Usually, the sea freight forwarders get a free time of 3-5 days after the container gets discharged. Mostly, the forwarders need to pay the demurrage in order to collect the cargo from the port.
Who has to pay demurrage?
1. Who is responsible for demurrage charges? In the case where goods are being imported, a Demurrage fee is charged by the port authority to the importer. For exports, when the loaded containers are not transported within the given laytime, a Demurrage fee is charged by the port authority to the shipping line.
Who is legally responsible for demurrage charges?
The shipper
The shipper is generally responsible for demurrage charges, but the consignee also may be legally obligated to pay, depending upon who was at fault for the delay and which party was contractually responsible to pay freight or other charges.
Who should pay detention charges?
“Post landing and removal to a place of storage, detention charges for goods that are stored, and demurrage payable thereon from this point on, i.e., when the Port Trust takes charge of the goods from the vessel, or from any other person who can be said to be owner as defined under Section 2(o), it is only the owner of …
Who is responsible for demurrage and detention charges?