In short, vessel chartering is fundamental to the shipping market. A trucking company will also charge detention fees if their drayman/trucker has to wait until the loading/unloading of a shipment. Detention, or per diem, charges are applied to container equipment after it leaves the terminal, if the equipment is not returned within the allotted number of free days. Proper handling paves the way for a reliable and cost-effective management of your ocean freight shipment. “That means before the free time ends, we can pick up the containers and move them out of the terminal to avoid demurrage.”, Because UPS can handle everything door-to-door, you won’t have to deal with several different companies at different stages. When it comes to calculating demurrage, every vendor, terminal, warehouse and container station has its own policy. Once your shipment has left its origin, keep close tabs on its progress to avoid surprises. Port charges are those charges levied by the ports on the container. Thus, the terms have international application. On the other hand, detention is a charge for extended use of the container until it’s returned empty to the shipping line. While a larger company is more able to absorb the cost or use its clout to negotiate the demurrage charges down, smaller companies could be financially devastated by one such costly mistake. See instructions. Why is demurrage important?
With exports, it applies to shipments leaving the departing terminal.
You must provide value for the fields marked in red. Here’s an example of demurrage fees: You have 7 days of free container usage. This charges includes the following: In my next article, I will discuss detail on port charges. But there are ways to keep such instances to a minimum. Proactive communication with each of the stakeholders involved in your shipment is critical. Demurrage charges depend on how much time a container is in port after arrival. Demurrage charges always relate to the time a container is inside a terminal. If the term is FOB for instance, it means that as soon as the cargo is loaded on-board at the origin, the shipper is free from all risks.
This is the time that a charterer holds a vessel in possession after the point that they are permitted to load or unload cargo; being known as the laytime. In most cases, the free days are indicated on the reverse side of the bill of lading document.
Per diem charges accumulate until you return the equipment to the terminal of the port, rail yard dock or airline. When it comes to clearance delays, importers and exporters seem to throw around three terms interchangeably: demurrage fees, detention fees, and per diem.
“They need to be on top of where their shipments are at all times. You are granted a limited number of free days, depending on the carrier and the location. Discover tech options that facilitate global shipments and help them reach their destination on schedule. The following definitions will indicate this difference. after this free time has expired. In general, shipments arriving by rail or air are given 48 hours of free time. Every commercial shipper will likely run into demurrage charges at some point. The charterer pays penalty (demurrage) charges … Read Also: FORM M NIGERIA: HOW TO PROCESS AND OBTAIN IT. Sorry, you have Javascript Disabled! What do I mean by trade rout?
The question of who pays what in international trade is a function of the trade rout followed. Moreover, the exact meaning and application may vary slightly among countries. After your free time runs out, you will be charged demurrage fees for each additional day. FORM M NIGERIA: HOW TO PROCESS AND OBTAIN IT, INCOTERMS: UNDERSTANDING SHIPPING TERMS IN NIGERIA, TERMINAL HANDLING CHARGES, SHIPPING COMPANY CHARGES. Copyright ©1994- What really do the terms demurrage and detention mean? The 2020 shipping peak season brings new challenges for shippers and will raise, even more, question marks than previous seasons.
That’s regardless of whether you ship one container every now and then, several per month, or more than ten per day. The shipping company usually have a time period allowed for the importer to pick the container, unload and return to the bay. Your business has to work hard to prepare the necessary paperwork, understand the customs requirements of each country and keep everything moving on schedule. Demurrage charge and detention are two terms that one cannot help but mention in the movement of goods between countries. However, there is difference between demurrage and detention charges.
Detention fees usually apply to domestic trucking. You have to pay these fees even though the congestion is beyond your control or that of your freight forwarder.
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