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Have you ever heard of the word Demurrage and Detention in the business of importation? You are probably wondering what this means. In this article, we will explain what this concept implies, its connection with shipping, and why it is important to know.
A lot of people have experienced Demurrage and Detention but they don’t understand what it means.
Demurrage and Detention has to do with charges, however, they are not so much a complex situation when you have credible logistics handling your shipment.
At Kenzinney we understand some of the complicated issues in shipping, hence, we will be explaining this issue bit by bit.
Demurrage and Detention are commonly related to shipping. They have distinct definitions, however, they are quite related
The charges for Demurrage are associated with the period of time a container stays inside a terminal. The charges are mostly used to discourage containers from being kept at the port for too long.
Meanwhile, Detention infers the period of time a container spends outside of the port. If the consignee keeps the container in his possession for too long, or more than the allowed free time, he/she will be imposed with a detention fee. Meaning that a detention charge is enforced when you have picked up your container, but haven’t returned it to the carrier at the stipulated time.
Additionally, Free Time is also used alongside Demurrage and Detention. Which means the amount of time a supplier can use the container for free. If it exceeds the stipulated time then it will incur charges through Demurrage and Detention.
The minute your container gets to its destination there are still other things that need to be done. As the customer, you are to return the container at the agreed location, such as a port or a container terminal and depot, the container will also be used for another shipment, likewise, for other people that need to ship goods, and for a smooth running of importation and exportation all around the world — the container is needed for this. So carriers must keep equipment ready to be used.
Free Time varies between various ports and carriers. Therefore it is important to put all this into consideration when booking your next shipment.
