What are demurrage and detention charges?

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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 is demurrage tariff?

Demurrage is a charge imposed by a shipping line to the consignee if the container isn’t cleared and returned to a designated empty depot in specified free days.

What does detention charges mean in shipping?

What Are Detention Charges in Shipping? Within the shipping industry, the terms “detention charges” and “per-diem charges” (or, “per day charges”) are often used interchangeably. These charges are assessed to the cargo owner when a container is not returned within a set number of days (free days).

Who is responsible for paying detention charges?

In most cases, the consignee, or receiving party, must pay a demurrage fee when goods sit too long in the terminal. In some cases, the consignee may also face a fee from a carrier for taking too long. For example, when receiving a maritime shipment, it may be necessary to return containers to the vessel.

How is demurrage calculated?

In the calculation of demurrage amount payable to shipowner, demurrage rate is multiplied by the number of days or part of day in excess of the agreed laytime. For example: Total Laytime Allowed 11 days.

Who is demurrage paid to?

By extension, demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading. Officially, demurrage is a form of liquidated damages for breaching the laytime as it is stated in the governing contract (the charter party).

What are the reasons for demurrage?

Here are some of the major causes for demurrage and detention..

Delays due to incorrect documentation.
Delays due to late receipt of documents.
Delays due to loss of documents.
Delays due to customs clearance or cargo inspection.
Delays due to release of cargo at destination.
Delays due to receiver being unreachable.

What causes demurrage charges?

Although, the most common reasons of demurrage are trigged by a shipper’s actions: Delay in payment. If the shipper paid for only part of a shipment, the vessel can refuse to release the freight until paid in full. Any delay in payment will lead to cargo detention at the port, which in turn causes demurrage charges.

What causes demurrage?

Why is demurrage charged?

“Demurrage is a charge levied by the shipping line to the importer in cases where they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days.” Demurrage charges can vary country to country as well as by carrier.