We give you the tools to understand and differentiate these two terms of the shipping industry:
- They are NOT the same thing: As they are both terms associated with the shipping container use, people tend to get confused about each word, but there’s a difference
-Demurrage: The charges will be applied when the customer holds the container inside the terminal for longer than the agreed free days.
-Detention: The changes apply to customers that hold the container outside the terminal longer than the agreed free time.
- Free time, Detention & Demurrage charges may vary from one country to another and from one company to another: You should always check the terms and conditions of the contract with your shipping line to get information about the free days and tariffs. Reefer and dry cargo usually have different rates.
- For demurrage, the charges start with the first day (calendar days) after free time expires. For detention, the free days start on the date the container leave the terminal gate.
- Free time days can be extended as per approval of the shipping line. You can also request it to your freight forwarding company.
- You could incur in port storage charges: If the container stays at the port facilities for longer than the free time (The free days and charges vary for each port), the charges are levied to the shipping line and the shipping line recovers the cost from the consignee.
TIPS: Stay ahead of schedule: Knowing your free days in advance, having all your shipping document ready to use and keeping a good communication with your customs broker or freight forwarder will help you avoid these unplanned additional charges.
Download our free app VecoGO! for clients and consignees to get all the information about free days, demurrage and detention charges on your smartphone.