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Detention vs Demurrage

Detention vs Demurrage

  • Demurrage  is related to cargo (when the cargo is in the container)
  • Detention  is related to consignment (when the container is empty before packing or after unpacking)

Demurrage and detention are related to both import and export. Thus we must understand both these terms respective to import containers as well as export containers.

Import containers

Demurrage

Demurrage charges are applied when import containers are full and under shipping line’s control.  In such a situation, the container is still not picked up by the consignee, and apart from this the free time for picking up has expired for that particular container. The free time is decided by the shipping line. The free period begins when the container gets discharged from the vessel to the terminal. Demurrage charges are applied over the storage of containers while they are within the steamship lines terminal, rail terminal, inland depot, or container yard. Demurrage is applied after the expiration of free time, and terminates as soon as the container is being picked up and taken out from the terminal.

Detention

Detention generally occurs when the consignee holds carrier’s container outside of the terminal port, or depot it beyond the free time allotted. Detention charges applies when import containers have already been picked, but the container (regardless if it’s full or empty) remains in the possession of the consignee and are not returned within the allotted time. For instance, let’s consider a free period of 5 days being provided for returning an empty import container to the shipping line after its pick up.  If the consignee takes 7 days in returning this container, the steam detention charges for 2 days will be applied.

Export containers

Demurrage

Demurrage charges are applied once the loaded export container has already been returned to the possession of the shipping line but cannot be further shipped out due to some non carrier related errors because the allotted free time has expired. For instance, if the exporter fails in providing relevant export information or export documentation within the respective time, the shipping carrier will be not able to load the container in the scheduled vessel and then it would have to be rolled to a new vessel. Demurrage charges will be applicable for the lasting storage period until and unless the container is made on board the next vessel.

Detention

Detention charges are applicable for export containers in the circumstances when empty container has already been picked to load, but the loaded container is returned to the shipping line after the completion of free time being allotted. Shipping lines usually provide 5 free days to the shipper for picking the empty container, loading it, and returning it fully loaded to the port. If the container is not returned within the free time, the line charge applicable detention for the additional days taken by the consignee.