What are demurrage charges?

What are demurrage charges?

Demurrage amounts may differ based on terminal or carrier and often increase after an initial period of time. Daily demurrage charges can typically range from $75 to $150 per container per day, but that’s just for the first 5 days or so. Charges generally increase the longer the cargo stays on the terminal.

What is the meaning of detention charges?

Charges assessed by a carrier against the consignor or consignee as compensation for holding a carrier driver and/or trailer beyond a certain stated period of “free time”. See 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.”

How do you calculate demurrage and detention?

From the day you exceed your number of free days, demurrage and detention charges will be added….Demurrage calculation: How expensive is it?

1. Number of free days: 5.
2. Days in total charged with detention and demurrage: 20.
3. The rate on 20ft on the first 10 days: 60,00.
4. The rate on 20ft after the 10 days: 120,00.

What is demurrage example?

Demurrage is defined as money paid to a chartered freight carrier if the vehicle or ship is delayed, or a delay in cargo loading causing a late departure. When a ship is not loaded on time as promised, this is an example of a time when demurrage would be paid.

How are detention charges calculated?

In the calculation of Demurrage charges to the shipowner/port authority, the demurrage rate is multiplied by the number of days/part days over the agreed free days.

What is difference between demurrage and detention?

Demurrage refers to the charge that the merchant pays for the use of the container within the terminal beyond the free time period. Detention refers to the charge that the merchant pays for the use of the container outside of the terminal or depot, beyond the free time period.

What is the difference between detention & demurrage in shipping?

In most South-American countries, the meaning of “demurrage” and “detention” is inverted! In these countries, “demurrage” refers to the time containers spend outside the port, while “detention” refers to the time spent on port grounds.

Who is responsible for demurrage and detention charges?

The shipper is generally responsible for demurrage charges, but the consignee also may be legally obligated to pay, depending upon who was at fault for the delay and which party was contractually responsible to pay freight or other charges.

Is demurrage a penalty?

When a chartered ship fails to load or unload its cargo in the timeframe set out in its contract, it may owe the owner of the vessel a penalty fee known as demurrage. In this sense, the term traces its origins to the French word “demeurer”, which essentially means “to be late”.

How is demurrage cost 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. Demurrage Rate $60,000 per day pro rata (PDPR)

How much is demurrage per day?

How much does demurrage cost? Daily charges range from $75 to $150 per container per day; however, charges can and do increase the longer the cargo stays on the terminal.

How do you calculate detention time?

The simplest way to calculate detention time is to divide the volume of the container by the flow rate into the container. The theoretical detention time of a container is the same as the amount of time it would take to fill the container if it were empty.

How can demurrage and detention charges be prevented?

4 ways to reduce Demurrage and Detention

1. Dispatching your cargo as far in advance as you can.
2. Schedule a little time buffer.
3. Keep in mind loading and unloading times. …
4. Request the driver to keep an eye on the clock.
5. Always try to request extended free time.

What are detention charges 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).