What is detention free time in shipping?

What is detention free time in shipping?

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 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).

What is demurrage free days?

Demurrage and Detention Charges Free Days In other words, the free time during which it is allowed to remain inside the port after discharge is 5 days here. More the number of days a container remains in port, the more demurrage that has to be paid to the carrier.

How do you avoid detention charges?

Tips to Avoid Shipping Detention Fees

1. Dispatch cargo as far in advance as possible. This gives the trucking company time to schedule the pick-up and/or delivery. …
2. Negotiate more time for live loads/unloads. …
3. Schedule your loading/unloading with the detention clock in mind.

What does Detention mean in logistics?

Detention: Costs incurred by a customer for using equipment beyond the given free time, typically outside of the terminal. Detention is charged when the carrier’s equipment is still in use by the shipper or consignee beyond the LFD, regardless if full or empty.

What’s the difference between detention and demurrage?

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.

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.

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 a Fedex detention fee?

DETENTION: Item 500: With power — $58 per 28-foot trailer each 15 minutes, $69 minimum charge. Without power — $192 per 28-foot trailer each 24 hours.

What is a detention fee?

What is “detention charges” in shipping terminology? A detention fee is assessed when the truck is held at the pickup or delivery location longer than the allotted “free time.” Now, the “free time,” varies depending on carrier. Generally, it’s two hours at pickup and two hours at delivery.

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.

How can you avoid paying demurrage and detention charges?

Have proper documentation readily accessible and pay duties in advance — specific to the geography or the materials in the container. Incomplete or not submitting the documents on time will result in unnecessary demurrage and detention costs. Secure customs clearance before the shipment’s arrival.

What are the reasons for demurrage?

Here are some of the major causes for demurrage and detention..

• Delays due to incorrect documentation.
• Delays due to late receipt of documents.
• Delays due to loss of documents.
• Delays due to customs clearance or cargo inspection.
• Delays due to release of cargo at destination.
• Delays due to receiver being unreachable.

What is a demurrage fee?

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.

How much are customs storage fees?

Costs that importers always pay US Customs collects this fee on most shipments that enter the country. It’s calculated at 0.3464% of the entered value (the cost of the merchandise, as entered on the commercial invoice you provide to your customs broker), with a minimum of $27.23 and a maximum of $528.33.

How long can a shipper detain a truck?

Driver Detention occurs when the shipper impedes the truck driver from loading or unloading through no fault of the carrier. The acceptable industry standard is two hours, although rules tariffs (carrier rules that govern their operation and their charges) allow up to four hours.

How does detention time work?

If a driver is stuck waiting for three, four, or five hours instead of the initially agreed-upon two hours, that’s considered detention time. Detention time takes up any of the extra time required to finish loading a shipment or unloading one.

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.