All you NEED to know about Demurrage & Detention
This is a thread
This is a thread
You’ve probably heard enough of people saying “D & D” but have no inkling of it really meant. Demurrage and detention are among the most common terms that importers, exporters and freight forwarders encounter on a regular basis
There is also confusion in understanding the difference between these two terms. In many cases, these costs can be detrimental to the extent that customers abandon their cargoes to avoid paying for hefty charges.
D&D is largely prevalent among import cases and also for export
D&D is largely prevalent among import cases and also for export
What is demurrage?
It is a charge levied by the shipping line to importer in the event that delivery of the full container out of the port / terminal (for unpacking, unloading, etc.) has not been performed within the permitted free period.
It is a charge levied by the shipping line to importer in the event that delivery of the full container out of the port / terminal (for unpacking, unloading, etc.) has not been performed within the permitted free period.
What is detention?
It is a charge levied by the shipping line to importer in the event that full container(s) have been taken for unpacking (assuming within the free period) but emptied container(s) have yet to be returned before the expiry of the given free days.
It is a charge levied by the shipping line to importer in the event that full container(s) have been taken for unpacking (assuming within the free period) but emptied container(s) have yet to be returned before the expiry of the given free days.
Requesting Additional Free Days
You may negotiate and request for free days from shipping lines. They would usually ask if it is for demurrage or detention as they want to ascertain whether you are going to keep the container before or after moving out from the port or terminal.
You may negotiate and request for free days from shipping lines. They would usually ask if it is for demurrage or detention as they want to ascertain whether you are going to keep the container before or after moving out from the port or terminal.
However, the definition of demurrage and detention varies from one port to another, so the shipping lines need to understand and clarify accordingly.
Shipping lines normally offer free period in combined demurrage / detention and is hardly for demurrage only or detention only.
Shipping lines normally offer free period in combined demurrage / detention and is hardly for demurrage only or detention only.
Why does shipping line charge D&D?
The cost of the container, maintenance, leasing and repair works constitute about 20% of the shipping line’s operation cost. A container, just like a fleet or ship vessel, only generates revenue when in circulation instead of idling.
The cost of the container, maintenance, leasing and repair works constitute about 20% of the shipping line’s operation cost. A container, just like a fleet or ship vessel, only generates revenue when in circulation instead of idling.
For instance, from the above example, having the container overstaying for 11 days simply means the particular container(s) will not yield revenue for that period of time.
Charging the D&D is the shipping line’s way of being compensated for this absence of revenue
Charging the D&D is the shipping line’s way of being compensated for this absence of revenue
Now, Who should pay for the charges?
In the case of imports, the consignee would be liable and in exports, shipper would have to pay for the charges. There could however be cases that the consignee is not able to clear the container as documents have not been received in time.
In the case of imports, the consignee would be liable and in exports, shipper would have to pay for the charges. There could however be cases that the consignee is not able to clear the container as documents have not been received in time.
Or there are simply delays caused by accidents, lack of manpower, congestion, human error, etc. in which consignee or the freight forwarding agent should outline the responsible party for the charges incurred, wherever they are.
End of thread
End of thread
Dear @UnrollHelper Please kindly unroll this thread for us. Thank You
• • •
Missing some Tweet in this thread? You can try to
force a refresh
