Difference between Storage and Demurrage

What is the difference between Storage and Demurrage..??

This is another area where some confusion exists and I will explain the reason why..

When a container is discharged off a ship, it is moved to the CY area within the port.. When the customer has done the clearance with customs and is ready to take delivery of the container, he/she will move the container directly from the CY..

As per Port of New York and New Jersey, in 2016, they handled around 3,2 million TEUs.. As you can imagine no port in the world has the storage capacity to store so many containers in the port CY area.. So it is essential that the importers clear the cargo within the “free period” offered by the port..

All ports offer a certain free period (may be 3-7 days) to allow the customers time to process import requirements and take delivery of the containers from the port.. However, there are cases where the consignee may be unable to take delivery from the port due to documentary, financial or contractual problems etc..

In such cases, the containers will be stuck in the port affecting the yard space, port productivity, causing berth and port congestion etc.. In order to discourage this practice and encourage the importers to be pro-active and take care of the cargo clearance issues, port will levy a charge on any container that has not been moved out of the port within the specified free time..

That charge is called Port Storage or Storage..

In some countries, due to this issue of lack of space inside the port/terminal the storage charges are quite exorbitant.. To alleviate this problem the shipping line may move the container to a private depot so that the storage charges are not so high for the customer..

image for storage container

The container may be moved out of the port area into the private storage depot within the port free storage days and then stored at the private depot till such time the customer is able to take delivery.. However, the private depot has to be customs bonded because the full container has still not been cleared with customs..

Depending on the country, whether it is the port storage or private depot storage, the shipping line may charge this to the customer.. And that is where the confusion arises..

Because when there is delayed clearance, the shipping line also charges Demurrage and/or Detention..

Demurrage and/or Detention is the charge levied by the shipping line on the consignee if the container is not cleared and returned to the nominated empty depot within the specified free days offered by the line.. The free days and charges might vary depending on the country and shipping line..

It is possible that a container can incur both Demurrage and Storage on the same shipment..

So when the shipping line charges storage, customers naturally assume that this is the shipping lines cost.. But storage generally is the cost of the port/terminal or depot which is collected from the customer via the shipping line..

However, there are some countries like Saudi Arabia and Japan, where the term demurrage seems to be used to denote storage in the port/lines terminal..

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

Are you aware of any other countries where storage and demurrage have the same meaning..??


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19 comments on “Difference between Storage and Demurrage”

  1. Pingback: A freight forwarder's liability on uncleared cargo - live case study - Shipping and Freight Resource

  2. Pingback: Are demurrage and detention charges justified..?? - Shipping and Freight Resource

  3. Pingback: Difference between Demurrage and Detention

  4. By NASIR Reply

    Hi, It is very defined the difference between storage and demurrage charges.Thanks

  5. By Kim Reply

    If you order goods from abroad … the sender sends out more than you require… the shipping company then charges you money for said items… but still will not release them can this be done … the sender has been paid in full … can he stop the release of said items

  6. By Faheem Uddin Reply

    In Pakistan the Demurrage is charged by Port authorities on full containers from vessel berthing date (5 days free time allowed to consignees).
    Storage is charged by Terminal on full containers from berthing date (5 days free time allowed)
    Detention is charged by carrier also from berthing date till container is returned as empty at carrier’s nominated depot. Carriers also allow some free days to their consignees.

  7. By Khaye Reply

    is the shipping line possible to charge storage and demurrage at the same time?.. or at one container only?.. pls advise the difference between storage and demurrage charges.

  8. By AVISH Reply

    Its still confusing can any one suggest me with simple examples the difference between detention demurage and port storage in export shipment,as far my knowledge is concerned

    Detention is the nos of free days offered by the shipping line to the shipper if the container is gated in after the free time detention charges apply as per tariff.

    port storage is the nos of free days offered by the line to the shipper once the container is gated in after the free time offered till the vessel sails.

    port storage charges will apply as per tariff.

    demmurage means if the container is inside the port if it crosses the free time demmurage charges will apply as per tariff.

    please confirm if my understanding about export shipment is correct.

    • By Hariesh Manaadiar

      Hi Avish, did you read my article “https://shippingandfreightresource.com/ground-rent-vs-demurrage-detention/“.. If you still have any doubts, let me know..

      1) Storage – amount charged by the entity storing the container (full or empty) till it moves out of the facility
      2) Demurrage – amount charged by the shipping line from the time of expiry of free days till it is moved out of port or terminal for unpacking
      3) Detention – amount charged by the shipping line from the time the full container is picked up till it is returned empty to the depot nominated by the shipping line
      4) Once returned, till it is reused, the empty container can incur storage at the depot

  9. By AVISH BANGERA Reply

    what is the difference between detention,portstorage and demurage in export shipment.

  10. By Wesley Reply

    In South Africa, it is understood as per Mr. Hariesh.

    The rest of the world understands it as Mr. Prabir does – I do not know why South Africa views it differently?

    It can and has caused massive amounts of confusion between South African parties and foreign parties; even within the same organisation when communicating with foreign agents.

  11. By tim Reply

    Sir, my understanding is the same as Mr Prabir DasGupta. Let say the shipping line able to provide 3 days FOC for Port area, then shipping line is reponsible to clear the item within three days. Then, the shipping line provide another FOC 3 days AT their own storage around port if there is any issues with their transport. So both demurrage and storage charges will incur if the shipping line took out the container later than these 6 days. After that, the shipping line sent the item to consignee and give them 5 days FOC where within these days, the consignee need to unstuff the items and return the container to shipping line where this is when the detention comes if consignee fail to return the container after 5 days. please, do enlighten me if am wrong.

  12. By S . Cannotreveal Reply

    Ok, what about a situation where consignee tried to pay before items were shipped and upon arrival the shipping agent and clearing agent inflate costs?
    Then added storage etc over a weekend in sa, what can I do to recover my funds?
    I have been ripped off

  13. By sanjiv Reply

    How about ground rent ? Is it same as Storage ? Is it charged by the port to shipping line and shipping lines intern charges the same to consignee ?

  14. By Prabir DasGupta Reply

    I am afraid my understanding is different.
    It is called Detention when the charge levied by the shipping line on the consignee if the container is not cleared and returned to the nominated empty depot within the specified free days offered by the line. The free days and charges might vary depending on the country and shipping line.
    Whereas Demurrage/Storage is the charge levied by the port on the shipping line (since they have the account with the port) if the container is not moved out of the port within the specified free days offered by the port.. The shipping line in turn recovers this cost from the consignee.
    Kindly comment and correct me if I am wrong.

    • By manaadiar

      No sir, your understanding is not right.. Demurrage/Detention is definitely a charge associated with the shipping line.. Storage is a charge generally associated with the port, but in certain countries, it can also be associated with the line if a container is moved to a private depot by the shipping line..

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