People often get confused by these two words Demurrage and Detention.. Well then, what is the difference..?? When dealt with in the context of containerised cargo, simply put,
- Demurrage relates to cargo
- Detention relates to equipment
Elaboration : Imports – A container is discharged off a ship on the 2nd July – Consignee approaches the shipping line to take delivery of the cargo around 12th July.. Working off a standard 7 free days from date of discharge, the line free days (different to port free days) expires on the 8th July.. So, the line will charge the consignee DEMURRAGE for 4 days from 9th to 12th July at the rate fixed by the line..
After the full container has been picked up by the client, for example if they take another 7 days to return the empty container, then it is known as DETENTION which again will be charged at the rate fixed by the line..
So basically before the full container is picked up, Demurrage is charged and after the container has been picked up, till the time the empty is returned to the lines nominated depot, Detention is charged..
Exports : In the case of exports, normally lines give about 5 free days within which the shipper has to pick up the empty, pack it and return it full to the port.. In case of delays more than 5 days, the line charges Detention (generally same tariff as import detention) for the days that the empty is kept with the client as empty or full..
Once the container is packed and say for example the shipper is unable to ship the same due to any reason, then the Demurrage will be charged at the rate fixed by the line till the full container is shipped out..
I realy enjoyed reading this article, its so rich!.
I never new the term Detention is the the best term to use when refering to the payments made due to the delays on the client’s side when unpacking the containers, i or rather should i say we(with my workmates) refered everything as Demurrage. Now i know.
Thanks very much, i will not stop vissiting this blog.
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Dear Hariesh,
My name is Hossam and I am working as a Senior of shipping accounts for NYK Line in Egypt.
I would like to thank you for these usefull details as well as your efforts.
May I give a brief about above mentioned article,
Demurrage
Demurrage fees are charged when import containers are still full and under the control of the shipping line. In this situation, the container has not yet been picked up by the consignee, and the free time for pick up set by the ocean line has expired for the container. The free period starts when the container has been discharged from the vessel to the terminal. Demurrage charges are applied for storage of containers while in the steamship lines terminal, rail terminal, inland depot, or container yard. Demurrage is applied after the free time has expired, and ends the day when the container has been picked up and out gated from the terminal.
Detention
Detention occurs when the consignee holds onto the carrier’s container outside of the port, terminal, or depot beyond the free time that is allotted. Detention is charged when import containers have been picked up, but the container (regardless if it’s full or empty) is still in the possession of the consignee and has not been returned within the allotted time. For example, let’s assume a period of 5 free days is provided to return an empty import container to the steamship line after pick up. If the consignee takes 7 days to return this container, the steamship likely will charge for 2 days of Detention.
In short, demurrage is related to cargo and detention is related to equipment.
Thanks!!
These terms are used there as well, but what i have explained is in terms of container shipping..
according to me demurrrage implements in dry bulk & detention in projects
Thanks to all of u for explaining in a very simple manner…..i couldn’t have done without u…
The article is not correct. Demurrage is for the excess days that we acquire space to store our cargo/cntr at the port’s premises. Detention is for the excess days of possession of the liner’s cntrs.
If we use more than alloted days we have to bear these.
I like Slava’s comment. It is simple explanation and very clear for understanding. Thanks a lot.
Hi Slava, please can you elaborate on how the “article is not precise” so i can clarify.. Thanks..
Unfortunately Dean717 got it backwards and the article is not precise either.
Demurage – charges for storing containers at the port (beyond free days. Of course the containers are full as you wouldn’t be responsible for anythign after returning an empty container).
Detention – not returning the container back to terminal within alloted time.
The stress is not on full / empty, but rather Demurrage is akeen to storage charges on port’s premises, while detention is for keeping container too long on CUSTOMER’s premises. Whether you keep it full or empty on your own premises makes no difference. Its like not returning a movie you rented – wether you watch it or not, you are still paying DETENTION. Demurage is pure storage on port’s premises – they need space and want you out of there as quickly as possible.
Thanks bunches. May I please have your view on this. Many days are lost during discharge of a ship due to the concurrence of the following events (not kidding): national holidays, rain, (allegedly) unproper loading of the cargo, strike due to accident occurring to the longshoremen for the said alleged unproper loading. Discharge condtions being SSHEX. Can the owners successfully maintain the ship was under detention ?
Excellent Site. Very difficult terms explained in English we can understand.
Thumps Up.
What Waqar quote is the best understanding between detention & demurrage. Detention charges are charges for not clearing or an act of detaining the laden in any port/authority premises where there is charges after a certain due days/times by the premises authority. As for demurrage, it is a charges due to loss of equipment usage/time. Detention is act of detaining & demurrage is the lost of owner utilizing the equipment for others.