Difference between Demurrage and Detention in import

  

The information provided here is part of Guide on howtoexport and import 

Difference between Demurrage and Detention in import

This article may get attracted by a lion share of readers to know ‘what is demurrage charges’ and ‘what is detention charges’. What is the difference between demurrage and detention?

In this article, I am trying to differentiate between Demurrage and Detention in port clearance under International trade. Here, I would like to state that demurrage and detention are two separate terms in imports and exports.

I am going to make difference between Detention and Demurrage with my own experience in the trade.

Let me share my experience in this. We have approached a shipping company to alloto 2 x 20’ containers to be shipped out to Rotterdam. As per the request of overseas buyer, we have approached the shipping line to waive off 10 days free ‘demurrage’ at destination. As per the buyer, he was needed ‘in writing’ from the shipping line, before booking cargo to them. Accordingly, shipping line granted us permission after their communication with their overseas counterpart. Once after receiving the said message by mail, we handed over cargo to the said carrier. The importer (buyer) took delivery of cargo and moved the containers from port of discharge to his factory for unloading. Once after picking up the containers for delivery, within 6 days, the empty containers have been unloaded to their yard after de-stuffing. However, the shipping line advised to pay against detention charges. When getting the clarification, we understand from the carrier, that we have obtained permission for ‘demurrage waiver’ and not for ‘detention waiver’. So, what is the difference between demurrage waiver and detention waiver?

If the cargo is in a ware house, the demurrage means the storage charges of the custodian of cargo. If the cargo is in a fully loaded container, the demurrage falls from both side - shipping line who owns the container and the custodian whose space is occupied. While taking delivery of cargo, you need to pay demurrage to shipping line and custodian of cargo.

Once after taking delivery of container by consignee to de-stuff the cargo at his place, the ‘detention’ takes place. In the case of ‘demurrage’, cargo will be in the container, and the container is under the control of the carrier (shipping company). Means, the shipping line has not issued ‘Delivery order” or ‘Release order’ to permit the importer to pick up the cargo for delivery. Also the goods may or may not be customs cleared or picked up by the importer to de-stuff the cargo. In the case of ‘detention’, the container has been picked up by the importer to unload the cargo, but he has not returned the same to the carrier (shipping company) after de-stuffing the goods.  You can also read - Why demurrage/detention waiver period is required at destination for import?

In short, demurrage is related to cargo and detention is related to equipment.

The above term is very important for anyone who is in the trade. Normally this type of difference will be known to us, once we get in to a dispute, unless otherwise we are deep in to the terms of each clause.  Also Read - How to obtain waiver on detention/ demurrage on imported goods/container from Shipping company / CFS?

Here, I have made difference between Detention and Demurrage in import export trade. Do you have different views about demurrage and detention? Would you like to add more information about demurrage and detention? Share your experience about this subject about demurrage and detention against import of goods in international trade.  

Did you like this article about difference between Demurrage and Detention? Write your comments below and share your experience about this subject Detention Vs. Demurrage.


The above information is a part of Online export import training guide 


 

Difference between Demurrage and Detention in import

 

Why demurrage/detention waiver period is required at destination for import

Terms used in international trade business such as Delivered ex quay ,Delivery instructions,Demurrage,Dest., Devaluation,Dispatch ,Discrepancy

Other details on how to import export  

Can importer sue against shipping company on non receipt of Cargo Arrival Notice

Difference between Purchase Order and Commercial Invoice

Difference between EGM and IGM

The formalities to sell / auction unclaimed or un-cleared goods

How to obtain waiver on detention/ demurrage on imported goods/container from Shipping company/CFS

What happens, if cargo not cleared by importer

How to start Export Business?

How to get Export Orders?

What are the risks and solutions in Export Business?

Click here to know India Trade Classification(ITC)

Click here to know HS code of other product/commodity

Service Tax - Click here to read complete notification under Budget 2014

What is Bank post shipment credit to exporters?

Types of export containers
Measurement of export containers
Foreign Trade Policy of India 2015-2020
MEIS, Merchandise Exports from India Scheme
SEIS, Service Exports from India Scheme
Merge your Commercial Invoice and Packing List for all your future exports
Export procedures and documentation

 


Comments


ajay: whether 10 free days would means no demurrage will be payable to custodian also.

Argee.Del: I came across your site today. Very commendable & informative. Regarding the difference between demurrage & detention - perhaps we can simply say that demurrage accrues to the port/terminal authorities and is paid to the S.line)& detention is paid to the owner of the equipment (s.line/a.line). Detention starts immediately after the detention free period is exhausted - whether or not delivery order has been taken from the shipping line. Furthermore (and this is relevant), the detention charge slab increases on a weekly basis (detention slab can vary with the shipping line), So if one has obtained detention free period of say 2 weeks, and the equipment has still not been returned to the S.line, the person will be charged as per the detention slab rate of the 3rd week!!

GOPINATHAN: Sir,pls advice, how the shipping line charging the Import Delivery order charges ,on what basis they are charging. pls advice.

Mohan Raj: Very Usefull Information i got here. Now clearly understand the things b/w Demurrage & Detention.. Thnks a lot

Surendran Kollerath: Hi Ajay, Normally custodian provides free period of 3 to 7 days as per their norms at different importing countries. However, further waiver can be extended on request on special cases where in goods uncleared for a longer period. Here, you need to apply case by case basis to concerned custodian

Surendran Kollerath: Hi Mr.Gopinathan, Shipping line charges import delivery order as per their terms and conditions amended time to time. However, freight forwarder charges import delivery order charges as service charges also. So, if any HAWB/HBL involved, please collect destination import delivery order charges before booking shipment.

Murali Krishna Devupalli: I would like to know all the issues regarding shipping line

TSANNAN: I would like to share the information of export import business.

Joe: I need to ship my household items and international moving companies had given me different amounts on port charges that I will have to pay in that country. They said the demurrage charges are $130 per day and I will pay 10 days but they did not tell me the ship line offers some days free for detention or days to return it. The companies never explained about demurrage and detention. How to find out the true? thanks

K DILIP: Demurrage / storage is based on the area occupied by the cargo. And it is upto the discretion of the warehouse if they offer any free storage time. It varies between country to country & company to company. In India, especially for import, the meter starts from day 1 with a minimum of 1 week charge.

Dayanand Khire: All the articles are fantastic and very much information, simple to understand and clearly explained. Thank you so much and keep it going.

Virgil Ratliff: Demurrage is the amt. charged by the S.Line from the expiry of free days till it is picked-up of port or terminal for unpacking while Detention is the amt. charged by the S.Line from the time the full container is moved out till it is returned empty to the warehouse of the S.Line. Hope the info helps. For more info, visit https://excelsior.ph/

Discussion Forum

You can also share your thoughts about this article.
Any one can answer on question posted by Readers