What does detention charges mean in shipping?

What does detention charges mean 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).

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 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.

What is detention in transportation?

Driver detention is when a driver’s route is delayed at either the origin pick up, or the destination delivery location for more than the agreed upon free time. In most freight transports, the driver has 2 hours at the time of pick up and 2 hours upon delivery free of any cost.

Who is responsible for paying 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.

What’s the difference between demurrage and detention?

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.

How do you avoid detention charges?

Top 5 Tips to Reduce Demurrage, Detention and Storage Charges

1. Make Sure Your Cargo is Ready on Time to Reduce Detention Charges. …
2. Be Smart About Customs Clearance to Reduce Demurrage and Storage Charges. …
3. Use the Expertise of a Freight Forwarder. …
4. Demand Demurrage, Detention and Storage Information in Your Quotation.

Is GST applicable on detention charges?

Yes, GST of 18% is applicable on detention charges per Government notification.

What is the rate of demurrage charge per wagon?

Rates of demurrage Charge: Demurrage charge shall be levied @Rs. 150/- per 8-wheeled wagon per hour, or part of an hour, for detention of wagon in excess of the permissible free time for loading or unloading.

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.

How can demurrage and detention charges be prevented?

Manage documentation digitally for quicker customs clearance One of the best strategies for avoiding demurrage and detention fees is to pre-clear cargo through customs. This, however, is easier said than done if your goods documentation is still managed by manual processes.

How can you avoid paying demurrage and detention charges?

5 tips to avoid demurrage and detention charges

1. Negotiate terms. …
2. Manage your schedule efficiently. …
3. Always have a plan B. …
4. Be well-prepared for local customs. …
5. Bring your own container.

What is the average detention pay for truckers?

The industry standard is to have trucks loaded in two hours. After that, shippers are expected to pay an hourly rate for every hour that a truck driver is detained. Detention pay can range from $25-100 an hour.

What is a detention in driving?

The Road Traffic Regulations define detention as the momentary immobilization of a vehicle due to an emergency (breakdown), traffic needs (traffic jam) or to comply with a regulatory precept (giving way). In short, it is the immobilization of a vehicle due to traffic needs.

Who pays detention and demurrage?

Demurrage and detention charges during import Usually, the sea freight forwarders get a free time of 3-5 days after the container gets discharged. Mostly, the forwarders need to pay the demurrage in order to collect the cargo from the port.

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.

What is detention in supply chain?

In the supply chain industry, detention is typically defined as the time a truck driver spends waiting at a pickup or delivery facility, rather than getting loaded or unloaded and back on the road.

What is trailer detention?

Detention is a charge made on trailers/containers held by or for a consignor/consignee for loading or unloading, forwarding directions or any other purpose. Typically, there are 2 hours free time before detention becomes an issue.

What is a drayage charge?

Drayage is the fees levied for the movement of freight over short distances to prepare them for the next stage of the journey or delivery to their destination. There are different types of drayage fees: chassis-split fees, pre-pull fees, and drop fees.

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).