What is demurrage time?

What is demurrage time?

Demurrage is a charge applied to containers that are left at the port or rail yard longer than their allotted free time, or past the “Last Free Day.” Shippers begin incurring this fee the day after the last free day and it is charged per container / per day until the container is picked up.

What does demurrage fee mean?

Demurrage is a fee attached to cargo that has overstayed its time at a terminal. These fees can be enforced by port officials. Depending on the vendor, terminal, warehouse or container station, fees and policies can vary. The amount of time you must pick up your cargo without being charged varies from vendor to vendor.

What is free time at port?

If a vessel arrives at the port PRIOR to 0800 hrs on Day 1, free time starts that day (Day 1). If a vessel arrives at the port AT or AFTER 0800 hrs on Day 1, clock starts the following day (Day2). Vessel arrival time is based on the vessel GPS, not the Port System time.

What is demurrage & 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.

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.

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.”

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”.

What can cause demurrage?

Although, the most common reasons of demurrage are trigged by a shipper’s actions: Delay in payment. If the shipper paid for only part of a shipment, the vessel can refuse to release the freight until paid in full. Any delay in payment will lead to cargo detention at the port, which in turn causes demurrage charges.

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).

How is demurrage 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.

What is the difference between per diem and demurrage?

Demurrage is issued when your cargo exceeds time allotted sitting at the terminal, and detention/per diem is the fee associated with keeping the equipment past the contractual time frame or could also mean the fees for making truckers wait extra time when loading/unloading containers.

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 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.

What is laytime in shipping?

In commercial shipping, laytime is the amount of time allowed in a voyage charter for the loading and unloading of cargo. Under a voyage charter or time charter, the shipowner is responsible for operating the vessel, and the master and crew are the employees of the shipowner, not the charterer.

What is demurrage clause?

Demurrage charges apply to a shipowner when he fails to load or unload the containers within the stipulated number of free days allowed (decided by the Port Authority). Demurrage charges are usually calculated on a per-day basis.

What does last free day mean in shipping?

LFD is an acronym that stands for Last Free Day. LFD is the last date before the port terminal or rail ramp will start charging fees for storage called Demurrage. It may also be used as the last date that the container can be out of the port terminal before usage fees or Per Diem fees are charged.

How long does it take to demurrage charges?

Generally, it is anywhere between 3 and 7 days.