Does demurrage and detention apply to LCL shipments..?? This question was raised by a reader..
Ajit, as explained in my article about the difference between demurrage and detention (this blog’s most popular article),
- 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)
As you can see, both Demurrage and Detention relates to containers or equipment that is owned or operated by the shipping line but used by the customer on a temporary basis after which they have to return it..
Till such time as the container remains in the hands of the customer, it will incur either Demurrage or Detention depending on whether the cargo is still inside or not respectively..
However, in the case of LCL shipments, the shipping line operates the container and therefore, is responsible to off load the contents of the container at their CFS..
So they cannot charge anyone for the demurrage or detention as the container is under their control and not in the hands of a 3rd party client like in the case of FCL cargo..
But if the cargo is lying uncleared in the CFS under the control of the shipping line, the shipping line may charge storage charges on the volume of space occupied by the cargo..
If the container is however operated or under the control of a Groupage operator, it maybe possible that the shipping line can charge demurrage or detention to the Groupage operator because they kept the box more than the allowed free time..
Which model is popular in your country – LCL or Groupage..??