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The Difference Between Demurrage vs Detention

When the container volume is large or the destination is far away from the unloading port, customers usually require a long enough container-free and stack-free period when booking space. I only know that it is easier to avoid cabinets, and it is relatively difficult to avoid stacking. What is the difference? I will share it with you here.

Definition of D&D (Demurrage & Detention)

Demurrage and demurrage are common charges in international logistics and shipping, but they have different definitions and applicable situations.

What is Demurrage

Refers to the overdue (overdue) usage fee of the container under the control of the carrier’s entrusted agent. It usually refers to the overdue usage fee of the container that occurs at the terminal destination or yard before the consignee clears customs and takes delivery of the goods. This fee is charged by the port or terminal operator to compensate for the cost of storage space taken up by containers or cargo. Specifically:

  • Application scenario: When the imported goods arrive at the destination port, if the consignee fails to pick up the goods within the specified free storage period, the port will start charging demurrage fees.
  • Calculation method: Demurrage is usually calculated on a daily basis, and the rate increases as the detention time increases.

What Are The Common Causes Of Demurrage

What is Detention

Detention fee refers to the fee charged to the consignee when the container fails to be returned to the designated location (such as port or yard) within the specified free period (Free Time) after being picked up from the port. This fee is charged by the shipping company or container leasing company to compensate for the time cost of the container being held in the hands of the consignee. Specifically:

  • Application scenario: When the consignee fails to return the empty container within the specified time after unloading the goods from the container, the shipping company will begin to charge demurrage fees.
  • Calculation method: Detention fee is usually calculated on a daily basis, and the rate increases with the increase of detention time.
The Difference Between Demurrage vs Detention

The difference between demurrage and detention

Free demurrage and free detention both refer to demurrage fees. The difference between the two is:

Why and where the charges are incurred:

Demurrage: Occurs at the port because the container or cargo is not picked up in time.
Detention: Occurs outside the port because the container is not returned in time.

Fees are managed by:

Demurrage: Usually charged by the port or terminal operator.
Detention: Usually charged by the shipping company or container leasing company.

Differences in free period:

Demurrage: related to the free storage period at the port.
Detention: Relevant to the free usage period provided by the shipping company or rental company.

In addition; there is also a free storage (free storage period): this is the terminal storage fee, which starts from the unloading of the container to the settlement at the terminal and ends when the container is picked up.

Among them, free demurrage and detention are billed by the shipping company because they are demurrage charges. Normally, it takes about 7 days. In some ports, due to transit or other reasons, you can apply for 10-14 days, and you can apply for longer ones. to 21 days;

The prepaid storage fee for free storage terminals is usually 5-7 days, which is usually difficult to apply for.

The difference between free time, free demurrage VS free detention

  1. The rent-free period for the container in the terminal after the goods arrive at the port: free demurrage;
  2. The rent-free period when the container is towed away from the terminal after the goods arrive at the port: free detention;
  3. Free storage period during which containers are pushed to the terminal: free storage.

Under normal circumstances, the free time applied for and approved = demurrage fee exemption + demurrage fee exemption. Under normal circumstances, the idle time at the destination is 7 days. Generally, shipping companies will approve applications for 14 days. The throughput of 21 days is a bit large, unless it is a stable customer or the shipping company has too many cabinets in the port to use. The storage terminal charges a container storage fee to the shipping company. The free storage time depends on the terminal, not the shipping company.

Demurrage and detention charges

The demurrage period is from the date the FCL is unloaded to the date the FCL is cleared from the port, less standard free time.

The detention period is from the date when the full container is cleared out of the port to the date when the consignee returns the empty container to the carrier for stacking in the port.

D&D (Demurrage & Detention) demurrage box, its related term is Free Time.

The demurrage fee is free from the date the goods arrive at the destination;

The detention period is free from the date the consignee picks up the heavy box.

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