Demurrage VS Detention : Common Addtional Charge When Use Container Shipping ( 2022 )

If you’re a new importer,  you may probably confused when reading the subject line.

However, if you ever received a freight invoice with the unexpected demurrage and detention charges,  you know what I am talking.

And the practical experience make you frustrated and angry, right ?

Not only you did not prepare for those fees, you may not be completely certain of the cause for such charges.

Well,  totay we’re going to set the record straight.

Therefore, this article aims to define this shipping terminologies.

• What is demurrange and detention
• The similarities and differences between demurrange and detention
• How long is the free time
• How much does it cost
• How to avoid them

What is detention ?

Detention is a cost raised when the cargo containers have been picked up by consignees at the terminal, but the empty ontainers have not yet been returned to the nominated depot within the time allotted.

i.e Detention-waiver days are also allowed by the line, but if the consignee takes longer than that time to return the containers , the detention charges come into play.

The similarities

• They both belong to the delay cost
• Both charged by shipping line
• Both applied to FCL shipping service only

The differences

Demurrage and detention charges difference lines in the container location and responsible parties

• Demurrage always refers to the time a container is within a terminal.
• Detention charges account for extended use of the container outside of a terminal.
• Demurrage is more effected by the Customs clearance speed. So who is responsible for the demurrage charges ? The importer and his Customs agent.
• Detention can be occur when container can’t be returned in time.

Specific demurrage & detention charges vary from one country to another, from one terminal to another. from one carrier to another.

But typtical chargeable method is per container and per day.

That’s how demurrange and detention charges calculated.

So these charges are applied on a progressive scale, rising the longer a container dwells at port.

In short, very costly, especially for continuous and large container amount shipments.

That’s why some importers will be shocked as we talked in the first beginning.

See the example APL demurrage cost to Sweden,

The cost is EUR 30 per 20’ft Container per day from 8th-12th, free 7 days if you remember.

Then cost doubled from 13th Onwards.

Here is a check tool of demurrage and detention cost among the different shipping lines.

You can access to carrier’s the official system to obtain the accurate cost.

Given the detention and demurrage charges is high, it pays to know how to avoid and minimize.

1. Secure a big warehouse with enough warehousing capacity, so to return the container to terminal in time after shipments discharged.
2. Plan ahead and book the container in advance, also use the reputable shipping line for the targe shipping route.
3. Change the transit ports or discharge ports given the port congestion. For example, you may want to discharge container at Tacoma, or Oakland when Los Angeles port is congested.
4. Track the container closely, so to clear Customs in time and pick up the container from terminal as soon as it arrival.
5. Negotiate more time for unloading. Remember to inform your forwarder to apply 14 days free detention at destination for every of your FCL container shipments.

Concludes

Besides the shipping cost itself, the covid-19 has impacted the global flow of containers.

Detention and demurrage fees are more likely to be occured than normal .

You should take steps now to understand these fees, monitor the conditions that cause them, and take steps to minimize them.

Now it is your turn.

What tips in today you gonna take ?

Will you plan ahead ? Or you will keep an eye on the container status ?

Are 10 days enough for you to unload all the container shipments ?

Either way, leaving quick comment below right now.