Understanding the Distinctions Between Demurrage and Detention in Shipping

Demurrage and Detention

Understanding Free Days

Free days, or free time, refer to the agreed-upon period during which an importer can move a container out of the port or return an empty container to the port without incurring additional fees. This period starts when the container is unloaded from the vessel onto the port terminal. The number of free days varies depending on the carrier and port terminal. Being aware of the free days at the terminal is essential to avoiding additional charges.

Demurrage Charges

Importers incur demurrage fees if they fail to retrieve a full container from the port or unpack it within the allotted free days. After the complimentary days expire, demurrage fees are incurred, which increase with each day of continued use.

Detention Charges

When a container is removed from the port terminal for unpacking or loading but is not returned within the allotted free time, detention fees are assessed. In essence, demurrage occurs when cargo remains at the port terminal beyond the allotted free days, whereas detention occurs when the container remains outside the port terminal beyond the allotted free time. After the complimentary rental period, demurrage and detention fees apply for each additional day.

Responsibility for charges

Unless otherwise stated in the terms and conditions of the bill of lading, shippers are typically responsible for these costs.

Preventing Delays and Charges

Despite the fact that delays are frequently unpredictable, proper planning and scheduling can help mitigate risks. Customers should be aware of the port's fees and free days, and hiring an experienced Customs Agent can prevent paperwork errors. The majority of carriers list detention and demurrage fees on their websites.

Requesting Additional Free Days

If you anticipate needing additional free days at the destination (e.g., due to cross-country rail or road movement), request them when you book the container at the origin. Once the cargo has arrived at its destination, carriers typically do not offer additional free days. Discuss and negotiate a high detention or demurrage bill with the carrier or their agent. In many instances, the carrier may waive the fee entirely or substantially reduce it.