What is the Difference Between Demurrage and Detention Charges?

Demurrage or Detention?

As business owners who engage and have frequent transactions with offshore suppliers and therefore regularly use freight forwarding services, it is important to know the difference between Demurrage Charges and Detention Charges. On the surface, they seem interchangeable at times for those not familiar, they even treat these terms as one and the same. 

This blog provides a quick guide on the difference between the two Charge types, and explains why it’s important to know. To better understand, here are some definitions of certain terms used in this instance:

Consignee: The recipient of goods being transported

Free period/days: The time period the shipping lines give the consignee to unload the cargo from the container and to return the empty container back to the shipping line.

When do we use the charging terminologies?

Demurrage

This charge takes effect inside the port when the cargo is still in the container waiting to get picked up and unloaded by the consignee beyond the free period given.

Detention

This charge takes effect once the container is outside the port, in possession of the consignee, and waiting to be returned to the shipping line beyond the free period.

Final thoughts before shipping out cargo

– Find out the rates for Demurrage and Detention so you are aware of the potential costs 

– Confirm the free period given (It’s usually 7-14 days but always best to confirm prior)

– Request additional Free time (Detention) where possible

– Always plan to unpack and alert your freight forwarder or trucking carrier as soon as the container is empty and ready for de-hire 

Why do we need to be aware of these charges?

Knowing this information will help the business properly plan and prevent unexpected expenses and unwanted costs. 

It will also be a great advantage if you have a reliable logistics partner to facilitate all these movements to ensure that your cargo is properly shipped with minimal or predictable costs while avoiding delays in delivery. 

McHugh and Eastwood Reliable Freight Forwarding Services

McHugh and Eastwood provide full service offerings for freight forwarding from customs brokerage to Airfreight or Ocean Freight to Warehousing. Get in touch with our sales team to find out more about our services.


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