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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 allot
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.
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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
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
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How to get Export Orders?
What are the risks and solutions in Export Business?
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Types of export containers
Measurement of export containers
Foreign Trade Policy of India 2015-2020
MEIS, Merchandise Exports from India Scheme
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