Are you a buyer, looking for an explainer on demurrage and detention? Then this article is for you. We explain what demurrage and detention are, how they're linked and why it's important to know about the terms.
While both can involve charges, these terms aren't something to be afraid of. As long as you have a good handle on your logistics, they're just another part of your cargo's journey and a key cog in well-planned, smooth-running global supply chains.
What is the difference between demurrage and detention?
Demurrage and detention are typically found together in logistics. They are two separate things, but they're closely linked.
- Demurrage: The time the filled containers spend inside the terminal. This is measured from when they are offloaded from the vessel or train until they are picked up at the port (gated out).
- Detention: The time the containers spend outside the terminal. Measured between picking them up at the port when they’re full and returning them to the port or a depot when they’re empty. For an importer, this is usually the time to unpack.
What is free time?
Free time, or standard free time, is the period of time that a carrier gives its customers for demurrage and/or detention activities, free of charge.
What are demurrage and detention charges in shipping?
Once the container arrives at its destination, its journey doesn't end. You, as the customer, must return it to an agreed location, such as the port or a container terminal and depots, so that it can be reused for another shipment. In order for millions of containers to continuously move around the world, it’s important that carriers can keep equipment available.
Demurrage and detention penalty charges are incurred if you go beyond the free time offered by carriers. For example, if your full container is waiting too long before being picked up and gated out at the destination terminal, or if you take too long to return the empty container to the port.
Free time differs between ports and carriers — so it's worth keeping an eye out for it when booking shipments! At Maersk Go we are transparent when it comes to free time. We show it with price details at the time of your booking, so you can plan your shipments better. Is the free time offered not enough for you? You can purchase extra detention days at the time of your import booking with us, so you have sufficient time to plan the arrival of your cargo at the desired destination.
Container detention & demurrage: key takeaways
- Free time determines the number of days a supplier can use the container for free — anything beyond this time incurs a fee.
- Demurrage and detention are separate but linked in the journey of your cargo.
- Demurrage charges always relate to the time a container is inside a terminal. Demurrage penalty fees/charges are used to prevent containers from being stored at the port for a long time.
- Detention refers to the time a container spends outside of the port. If the consignee holds on to the carrier's container beyond the allowed free time, detention fees will be imposed. In other words, a detention charge is applied when the container has not returned to the carrier on time.
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