Difference between Demurrage and Detention

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

In the context of containerised cargo, in generic terms,

  • Demurrage relates to cargo (while the cargo is in the container)
  • Detention relates to equipment (while the container is empty after unpacking or before packing)

  Image for demurrageLets see how it works..

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 (after expiry of free days) and after the container has been picked up, till the time the empty is returned to the lines nominated depot, Detention is charged..

Image for detentionExports : 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 various shipping lines in various countries..

Some countries call it combined demurrage/detention in some countries, whereas in some countries it is shown separately.. In yet some other countries like Saudi Arabia and Japan, the term demurrage seems to be used to denote storage in the port/lines terminal..

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

How are these terms handled and dealt in your country..?? Please do share for the benefit of all..

 

What did you think of the above article..?? Comment below..

99 comments on “Difference between Demurrage and Detention

  1. Asha S V says:

    I am from India. I have been handling import from Vietnam,China,Taiwan and so on. it took quite a long time for me to understand the difference between Demurrage and detention. finally negotiating with liner for free days extension from 14 to 21 days and even in container freight station free days extended from 3 to 14 days. Finally this circus helped in achieving “0” detention and Demmurage. Iit all depends on the volume and providing continuous business.

  2. tanu says:

    Hello Hariesh Manaadiar,
    I am doing a training on foreign remittance in which i am working on demurrage and detention charges. I am read your blog and its very helpful for me to understand but i have a question that their is any thing like if our cartoon is not release from port with the given time so our free days are not given to us?? and they charge demurrage charges for full days??

    1. Hello Tanu, if you are talking about cartons, then it would be LCL and for LCL there is no demurrage.. Demurrage will be only on full containers and Detention on empty containers.. Demurrage/Detention will never be on LCL cargo..

    2. tanu says:

      Sry sir i am talking about container.

    3. Port free days are different from line free days.. So if the container is stuck in the port due to any reason and you are out of line free days then line will charge demurrage/detention..

    4. tanu says:

      Thank you so much sir for clearing my doubt.

    5. tanu says:

      but on the port if we are late to receive our container than they are charge for the free days also??

  3. EDWARD GAITHO says:

    This is really helpful as many people in the Maritime industry are yet to understand the fact of this

  4. Request importing guide

  5. Shak says:

    Very informative… by the way can anyone help me to understand the liability of a container damages… if consignee found some damages to the floor of container while destuffing at their door… is there any written rule governing liabilities when equipment is found damaged

  6. Rafael says:

    As per my experience, liner is debiting demurrage as per above but depending of countries, port terminal will debit its own storage tariff (working with similar concept). So generally, you will pay storage (if applicable) to terminal at container pick up time and detention / demurrage (if applicable) at empty container delivery back to liner’s equipment depot. Am i correct?

    1. Hello Rafael, yes you are right.. Same container can incur Storage (port/terminal), Demurrage and Detention.. Also read http://shippingandfreightresource.com/difference-between-storage-and-demurrage/..

  7. Ly says:

    Hi Hariesh

    Could you advise detention start calculate 01 day before cargo arrive port?

    1. Hello Ly, that depends on the shipping line and their tariff..

    2. Shankar Pilane says:

      No, detention normally starts after the cargo arrival at destination port.

  8. roslan says:

    Nice blog and congrats to blog owner of having this kind of wonderful blog like this.
    since I am still new in this field, can anyone teach/share how the demurrage is calculated and relates with lay time. I have read/study but still confuse on when demurrage is actually incurred and to who/whom and how the compensation takes place or how they pay?
    If someone can deeply describe/discuss with some sample of timing also good for better understanding especially for newbie like.

    Later on, if still in doubt maybe i will keep giving some situation which require more clarification from the expert if ok.

    Thanks all 🙂

    ~ops, sorry also for my bad english language.

  9. Nice article. There is indeed a lot of misconception about detention and demurrage.

  10. Caljon says:

    Hi Hariesh
    First of all, thank you for sharing your insightful and invaluable know-how about shipping. It is my first time in shipping and from your website, I understood more than I tried when listening to people around me. So, thanks!
    I have a couple quick questions please. My freight agent has told me that they will have to charge me £80 because Customs had stopped my container and took it for an x-ray. When I asked for the proof of this, they stated that they cannot provide. So, must I take their words for it?
    Lastly, who ensures the freight agent had taken the due responsibility to fill in the necessary forms correctly, to avoid Customs holding back our containers and causing extra rent charges, etc. etc.!!!

    Many thanks.

    Regards

    1. Hello Caljon, thank you for your kind words.. I am not sure which country you are based in.. But whichever country it is, in general if customs stops a container for inspection, they will send a notification to the shipping line saying that the container needs to be moved for customs inspection and the line cannot release till it is done.. So your freight agent should be able to provide you with this proof or you can also ask the shipping line.. It is the responsibility of your freight agent to ensure that all info is submitted properly.. If you feel that it has not been done so, then you can also speak to Customs to find out the reason for the stoppage..

  11. Raja Rastogi says:

    Hi, Hariesh,

    Your article was extremely useful, where it has clearly mentioned distinction between Demmurage & Detention.

  12. anis says:

    If is says combined demurrage/detention 14 days, does it means 14 days for demurrage, 14 days for detention (which start together after discharge), or it actually means 7 days demurrage + continue with 7 days detention?

    1. Hello Anis – 14 days combined dem/det means consignee has 14 days from the date of full pick up till the date of empty return and it is upto the client to choose whether it will be 10 days dem + 4 days det or 8/6, 6/8, 7/7 etc etc..

  13. Thanks for the post Hariesh, very informative. Just thought of pointing out for all the readers that the terms Demurrage and Damages for Detention may also have other meanings in other business areas such as in Bulk Chartering as you have rightly pointed out elsewhere.

  14. Ajitpal S Rana says:

    Dear Hariesh,
    Thanks for the explanation. However another basic clarification how does Detention/Demuurage apply in case of LCL shipment?
    Appreciate your inputs.
    Ajit

    1. Hi Ajit, I have responded to this question as a post http://shippingandfreightresource.com/demurrage-and-detention-for-lcl.. Trust this will help..

  15. Wubshet says:

    Dear Hariesh,
    I have got simple & clear explanation about Demurrage & detention from your note. Some times peoples & mixing demurrage with storage & detention with truck payment for not loading/unloading on agreed time. Thank you for sharing this.

    1. You are most welcome Wubshet, glad that this article could be of help..

  16. Zaidi Jamaluddin says:

    nice note. really useful for beginner. Malaysia they separate detention and demurrage.

    If u dont mind, I’ll use it as a reference for my junior.

  17. Thomas Moran says:

    Hariesh is correct and the Supplier isn’t wrong except when he said Hariesh was wrong – because he only knows what is true for his industry; some of these terms/terminologies are used differently by different folks in different businesses and, by the way, lawyers get it wrong in the contracts at times. Big distinction is between bulk carrier terms vs. container industry terms in the community reading this blog. But as an ex grain trader there is also detention on barges and rail cars if you do not unload them into your grain terminal fast enough. You pay demmurrage I think to the vessel owners if you do not load them fast enough but sometimes, by the way, it pays to slow load them because in 2-4 days the discount on the price of the grain in barges/rail cars arriving is that much cheaper than the price today – here is where a little knowledge by ship owners of the local market conditions pays. Container markets different obviously. “SUPPLIER” post could also note that detention can be charged by and paid to the container trucker if pick up facility takes too long to load him, etc. We also pay detention to truckers of domestic USA shipments if the shipper takes too long to load them, or the Receiver takes too long to unload them.

  18. Priya says:

    Hariesh,
    Must say this is a great platform for knowledge sharing, simple language, lucid illustrations…its a praise deserving effort! Keep at it!!!!..Priya

    1. Thank you very much for your kind words Priya, glad to be help.. 🙂

  19. 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..

  20. 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/..

  21. Baseerat says:

    when exactly does free detention time start? from the date the container is picked up form the port of from the time the vessel arrives at discharge port?

    1. Hi Baseerat, the answer to this question depends on the shipping line, what they define as detention and also the country as demurrage and detention varies in definition, in quantum and in time from country to country and shipping line to shipping line.. There is no global or universal definition to it.. Generally demurrage commences from expiry of free days set by the shipping line.. Once container is empty, detention will start till the empty is delivered back to the lines nominated depot..

  22. Hariesh, with reference to the contents above and the definition in terms of the clarity, then I have one question. if demurrage relates to the cargo, which belongs to the owner, then why would the line charge demurrage on the cargo to the client, whereas they can only raise the detention for the equipment its being transported in. My reasoning is that the cargo does not belong to the line and the customer has leased the container to transport his cargo so I would say detention would be the cost and not both.

    1. Kerwin, demurrage as a term has been in existence before containers.. Demurrage as an expression was originally used and continues to be used in the bulk trade where it refers to the amount of money that a charterer should pay a shipowner in case the operations of the vessel is delayed more than the period agreed and such delay is normally due to cargo operation..

      The demurrage is charged because the presence of the cargo in the ship is preventing the shipowner from using the ship for other business.. The quicker the cargo is loaded and discharged, the quicker the shipowner can do the next fixture..

      So demurrage has been linked to cargo from the beginning and the link continued when containerisation happened..

      While the cargo is inside the container, the cargo and container is under the lines custody (not ownership, just custody) and the line is unable to use the container due to customer not clearing it in time, therefore demurrage applies.. Once the cargo has been unpacked but the empty container is still with the customer, the customer is now “detaining” the container, therefore detention applies.. Much like you intermodal operators charge for truck detention.. 🙂

      But of course every shipping line has their own definition and methods of calculation, so there will be variations in terminology, but what I have described above, is a technical explanation..
      Trust this clarifies..

    2. Your contents noted but again I say that the lines murder the customers with these costs. Cant compare to us Intermodal operators to the carriers mate cos we are flexible with standing time….lol

  23. Said Slp says:

    Please advise if demurrage cost is applied for import shipment in Shippers Own Containers?

    1. Hi Said, Demurrage is not applicable to Shipper Owned Containers, only for line owned containers.. Please read my other comment regarding the detailed explanation of demurrage in response to Kerwin’s message..

      However, there maybe port storage applicable even if it is Shipper Owned Containers and you can read the difference between demurrage and storage here..

  24. rakesh says:

    Hi,

    As i was going through i came across one question that is
    as an exporter i am ready with ma goods in container sealed and kept inside the port on 5th free day which is ready to export , but the vessel is full ,so will the liner charge me detention/demurrage for that
    if yes what it would be called as

    Thanks.

    1. Hi Rakesh, under usual terms of contract with the shipping line, the shippers responsibility is to deliver the container to the port of loading at the nominated stack area..

      Once this is done, it is the shipping lines responsibility to ensure that the containers are loaded on the nominated ship..

      If such loading is delayed beyond the nominated ship/date due to any issues of the shipping line, they cannot charge you the port storage, demurrage, detention etc, unless they can prove that the loading didn’t take place due to some documentary issues created by the shipper or their agent..

  25. D.Dinagarane says:

    Hi,
    For container shipping what is the detention charges applied.

  26. Basskar says:

    Pls following are my queries on this issue:

    what is the difference b/w container deposit and detention ??
    is detention a refundable fee or how like ??

    1. Aiby says:

      Container deposit was guarantee (refundable), just in case container missing or some damage condition, liner will deduct from it directly.

      Detention will bill you if the time of empty container return longer than the free time given. (as per above explanation)

  27. Zeeshan says:

    Hi, how you will explain 14 days free combine(demurrages/detention)

  28. demurrage is charged in the port
    detention is charged outside the port until it reaches again the port

  29. Carol Griffith says:

    Justo: The difference can be summed up as follows
    Demurrage is charged while the container is still at the port past the allowable free time
    Detention is charged while the container is out of the port past allowable free time. This applies to both import and export containers.

  30. Justo says:

    I still don’t understand can somebody pls explain to me clearly
    1. what container detention is and
    2.what container demurrage/ rent is

    1. Justo, which part of the article didn’t you understand..??

  31. solera marites says:

    I need to recieve the shipment. That arive 19 of july how ever i was told that nd to pay tax..

    My problem is has deffecut to acces.. It is becouse of some reason..nw its already over 1 week in ther posesion.. Do
    i have to pay the pay the
    demurrage that start
    on the 1st of aug.

  32. Uli says:

    Why do I have to pay detention fee when I return the empty containers long before expiry of demurrage free time? We heve 14 days demurrage free time but only 2 days detention free time. I pick up containers and return them empty within 7 days from arriving at port. Seems completely unfair to me.

    1. Risyam says:

      Hi Uli,

      You were given 14 days demurrage free time, means you were given 14 days to pull out the container from port.
      Once the container outside the port, the detention time is running, and at this time you only have 2 days free time to return the empty container back.

      Your info was not complete, but I assume you took more than 2 days to return the empty container right?

  33. Millicent says:

    Thank you for helping me find answers to my shipping & freight queries in a more elaborate way.

  34. David Rebon says:

    With the case of chemical tankers loading cargo, how can demurrage or detention be applied.

  35. Olesya says:

    Could anyone explain the difference between late pick-up fee (LPF) and demurrage?

  36. Innocent Timburwa says:

    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.

  37. Hossam Elsharkawy says:

    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!!

  38. gaurav says:

    according to me demurrrage implements in dry bulk & detention in projects

    1. These terms are used there as well, but what i have explained is in terms of container shipping..

  39. shruti says:

    Thanks to all of u for explaining in a very simple manner…..i couldn’t have done without u…

  40. Vishal says:

    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.

  41. an2008 says:

    I like Slava’s comment. It is simple explanation and very clear for understanding. Thanks a lot.

  42. Slava says:

    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.

    1. Hi Slava, please can you elaborate on how the “article is not precise” so i can clarify.. Thanks..

  43. Cecilia says:

    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 ?

  44. Gemini Man says:

    Excellent Site. Very difficult terms explained in English we can understand.
    Thumps Up.

  45. Dean717 says:

    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.

  46. magda says:

    The distinction is very helpful; I hope I can get to know also:
    – if my client needs 10 free demurrage days at import, who can negotiate – me (the exporter) or the client? And with whom: with the shipping line or with the port authority?
    Thanks!

    1. Manaadiar says:

      Hi Magda, glad to be of help.. If you are talking purely of demurrage/detention free days at destination, this is usually negotiated with the shipping line by the shipper/exporter if they know in advance that the consignee requires the free days at destination.. If they dont, they can still negotiate this or this can be negotiated by the consignee whoever has a better relationship with the line.. There is no hard and fast rule on who should negotiate.. Demurrage and Detention has nothing to do with the port.. The ports equivalent charge for demurrage/detention would the Port Storage for which generally ports around the world do not give any additional free days..

      Trust this helps..

    2. magda says:

      Yes, it helps a lot.
      Thank you so much! Have a nice weekend!

  47. if it is express B/L, what message shipping line or forwarding agent send to their counterpart at destination port. what shipping documents required at importing / exporting country to clear the shipment.

  48. In bill of lading consignee is “TO BE ORDER” in this case shipper endorsement is required. pls explain in legal and technical way.

  49. waqar says:

    Det is charged for detaining the transport and dem is charged for keeping the good at port. det will be charged by trnsporter and dem will be charged by port…

  50. Ariel says:

    How do we apply demurage and detention on export shipment in bulk?

  51. Brenda says:

    We have concluded an agreement with buyers in Japan after they insisted on 21 days freetime. Only after the contract has been signed and product delivered, did we realise that this 21 days freetime actually means nothing! Our buyer in Japan is only removing the containers after the 7 days freetime and then a further 14 days later. So, we are stranded with paying for the additional 14 days at JPY4000 per container from day 8 – 15 and then JPY8050 per container from day 16 – 21. In total this is more than the freight rate per container! Am I right in saying that this should actually have been demurrage charges and not freetime? How do I go about in turning the shipping line’s arm to change/reduce this or is there nothing that I can do about this?

  52. tam says:

    In your example, if holiday is 5th and 6th of July, the demurrage and detention will be extended to 11th Jul? Pls kindly advise.

    Thank you!

  53. nazim says:

    Hi nannadiar
    I asked you this question because I read that demurrage relates to cargo ; even there is no liability for th shipping line concerning the equipement.

    thnks in advance

  54. nazim says:

    what’s about SOC container how we should proceed

    1. manaadiar says:

      Hi Nazim,. for SOC’s there is no liability for the shipping line.. They are not paying rent towards it so there will be no dem/det applicable there.. However, if there are any port/depot storages , that will have to be paid to the shipping line..

  55. Albert Mhizha says:

    Hi. The same principle as in detention and demurrage of containerised cargo applies. For a example is a ship is schedueld to pick up some dry/ wet bulk cargo at a certian port and same arrives there before cargo is ready, provided there is free days allowed after docking, the detention charges will apply, and if cargo is loaded on a ship and for some reason docs are not presented in time or other issues beyong the control of the master or captain of the ship, then demurrage charges will apply. This does not apply of course to natural causes, strikes, lock outs etc etc.

  56. sameer says:

    How is Detetion assessed in case of loading and discharging of dry/wet bulk cargoes.

  57. Muhammad Zeeshan says:

    Thanks to enhance my knowledge

  58. Victor says:

    So in effect Demurrage & Detention is the same…

    1. manaadiar says:

      Well we could call it that yes.. Only difference could be that demurrage and detention charges may be different depending upon the shipping line.. Detention is normally cheaper than Demurrage..

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