Detention and Demurrage – What’s the Difference?

Importers and exporters often wonder what the difference is between Demurrage and Detention for shipping containers. The easiest way to look at the difference between the two terms is to break it down between import and export containers.

 

Import Containers

Demurrage

Demurrage fees are charged when import containers are still full and under the control of the shipping line.  In this situation, the container has not yet been picked up by the consignee, and the free time for pick up set by the ocean line has expired for the container. The free period starts when the container has been discharged from the vessel to the terminal. Demurrage charges are applied for storage of containers while in the steamship lines terminal, rail terminal, inland depot, or container yard. Demurrage is applied after the free time has expired, and ends the day when the container has been picked up and out gated from the terminal.

Detention

Detention occurs when the consignee holds onto the carrier’s container outside of the port, terminal, or depot beyond the free time that is allotted. Detention is charged when import containers have been picked up, but the container (regardless if it’s full or empty) is still in the possession of the consignee and has not been returned within the allotted time. For example, let’s assume a period of 5 free days is provided to return an empty import container to the steamship line after pick up.  If the consignee takes 7 days to return this container, the steamship likely will charge for 2 days of Detention.

 

Export Containers

Demurrage

Demurrage charges occur after the loaded export container has been returned to the possession of the steamship line but cannot be shipped out due to non-carrier related errors once the allotted free time has expired. For example, if the exporter fails to provide required export information or documentation in a timely manner, the steamship will be unable to load the container onto the originally scheduled vessel and will roll the container to a new vessel. Demurrage charges would apply for the additional storage period until the container is shipped on board the next vessel.

Detention

Detention is charged for export containers in which the empty container has been picked up for loading, and the loaded container is returned to the steamship line after the allotted free time. Steamship lines typically provide 5 free days for the shipper to pick up the empty container, load it, and return it full to the port. If the container is not returned during this free time, the line will charge detention for the additional days the container is in the possession of the consignee.

 

PNG Worldwide helps importers and exporters to better understand requirements and stay within the free time allotted by the steamship lines for their containers. Whether it is related to demurrage, detention, import, or export, we will help you eliminate unnecessary costs.

For additional information, or questions related to demurrage or detention, please contact info@pngworldwide.com