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What are the common causes of Demurrage

“Demurrage is a charge levied by the Carrier(Such as EMC,APL,COSCO,OOCL,HPL…Etc) to the importer who they have not taken delivery of the full container and move it out of the port/yard area longer than the agreed free time.”

Demurrage charges as well as by carrier, should best to ensure how much free time you get exactly ,in order to avoid matters further, a designated free time of typically 3 to 5 days.Demurrage amounts may differ based on terminal or S and often increase after an initial period of time.Demurrage charge is an avoidable cost carefully.However if you don’t take care of this problem,charges will overtake the price of the shipments soon which will leave many buyers to abandon the cargo without any option.

Demurrage Charge should be cost with variety of reasons. Generally caused as below:

What is demurrage?
  • ⭐Importer or their agent in destination port did not receive the documents(Bill of loading,CIPL…Etc) in time for customs clearance in Destination Port.
  • ⭐Documentation received by consignee(Or their agent) is incorrect or insufficient.Such as the B/L details not match with the CIPL.
  • ⭐Importer or their freight forwarder was unaware of the Delivery time of the cargo and was unable to do the customs clearance in time
  • ⭐Importer or their freight forwarder does not have the finances in order to clear the container overtake the agreed free time
  • ⭐shipper and consignee have big trouble

Although these reasons may caused by shipper or consignee, usually the demurrage charges and duty will falls upon the consignee.

As a example, take a customer who purchase goods which volume have 6×40′ containers of Hardware from China, but the containers cannot be cleared due to don’t arrange customs clearance in time.Let’s say the Carrier’s demurrage charge is USD100/40’/day for the first 10 days after the expiry of free days.

If these containers stand for a period of say 7 days after the expiry of free days, demurrage charges will cost  USD100 x 8 x 7 = US$ 5600/- purely due to documentary delays.

As we can see any delays caused due to the above reasons will result in extra and avoidable costs for you.

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