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)

 

Lets 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..

Difference between demurrage and detentionWorking 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..


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..

Difference between demurrage and detentionOnce 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..

 


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108 thoughts on “Difference between Demurrage and Detention

Be part of the discussion and share your views about the article here..

  1. Whenever any service is given to someone, some charges or amount is involve in it, to collect that amount debit note is prepared on behalf of it we will paid for that service. detention charges are those charges which can occurred to someone who who has picked the container & though the container is empty he has not returned it even after the free time is over.

  2. First to inform Carrier to void the original B/L. Then give Carrier a mortgage of about 1.5 or 2 times of cargo value. Also to announce (the loss of B/L) in the Paper with large calculation. Take this newspaper to Carrier to apply reissue MBL.

  3. it is very helpful to learn from the best the explanation and terminology are being explained easily I can also now have the insight of what is happening in the industry thanks for everything

  4. Thank you Mr. Hariesh manaadiar for your brief explanation on these two terms and i understand in good manner. some company use these terms interchangeably and the meaning from one to another is seems different. and also i like to appreciate your blog and it helped me in understanding many shipping and freight terms. i think that i know more in the future from your blog. Thank u very much!!!!

  5. 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.

  6. 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??

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

  8. 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

  9. 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?

  10. 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.