Difference between Demurrage and Detention

Demurrage and detention are two words that often confuses people.. Is there a 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..

What I have mentioned above is the generic and most common form of use of these two terms.. There however is a difference in the usage of these terms by the various shipping lines in various countries..

In some countries they call it combined demurrage/detention, whereas in some countries it is shown separately..

Best option would be to check with the shipping line in your country how these terms are defined..

 

Now that you have read it, why don't you share your views about it..

64 comments on “Difference between Demurrage and Detention

  1. TSN says:

    I have seen a contract saying: “Discharging; CQD basis, no demurrage/no detention”. How can a shipping line give “no demurrage, no detention” contract?

    1. Hi TSN, these terms you have seen “Discharging; CQD basis, no demurrage/no detention” are used in bulk shipments and is completely different from the demurrage/detention that is covered in this post which is mainly for containerised shipments..

      However, to answer your question, in bulk shipments, a charterer is required to advise the load/discharge rates (time it will take to load or discharge the cargo) to the ship owner based on which they will agree for a freight rate.. If the charterer doesn’t know the rate of load/discharge, but is confident that this activity will take place as normal, they would advise the load/discharge rate as Customary Quick Despatch (CQD).. CQD means that the load/discharge operation will be done as fast as can be possible under the prevailing circumstances..

      If the charterers fail to load or discharge as per the load/discharge rates they have given and allowed in the contract, the owner will hold them liable for “demurrage” @ a rate which is pre-agreed between the owners and the charterers..

      At the other end of the spectrum, if the charterers finish the load/discharge operations before the time frame indicated, then they can claim “despatch” from the owners @ a rate which is pre-agreed between the owners and the charterers since they were able to despatch the ship quicker than anticipated..

      In the case of CQD, there is no provision for demurrage or despatch and this could sometimes work to the detriment of the shipowner..

      Trust this assists..

    2. TSN says:

      Thanks, Hariesh, for your explanation. Does it mean that if I am a charterer, I should try to get CQD?

    3. You can, but it would depend on the agreement with the shipowner..

  2. Supplier says:

    I think last answer is very misguided. Both detention and demurrage start from discharge of containers.

    Detention is time allotment given by the SHIPPING LINE to the customer to return the empty container back to depot.

    Demurrage is time allotment given by the PORT OR TERMINAL to REMOVE empty container from their premises.

    The two are not related, rarely get paid to the same entity, and cover completely different situations.

    Example: Free time: Demurrage: 5 days / Detention 15 days. You must remove full container from the port storage within 5 days of discharge, but you have an additional 10 days before you have to return the empty back to the shipping line.

    1. Hello Supplier !! – as I have mentioned in my post, various countries have various ways of classifying and charging demurrage and detention.. Some lines offer combined demurrage/detention, some offer it separately..

      You mention “Demurrage is time allotment given by the PORT OR TERMINAL” which is not right.. Demurrage or Detention is time allotment given by the shipping line..

      Maybe you are mixing with storage.. Please read this article for the difference between the two – http://shippingandfreightresource.com/what-is-the-difference-between-storage-and-demurrage/..