Demurrage is a fine to the buyer which is enforced by a freight provider if they do not take their goods away from a port or terminal. Often ports and terminals allow importers to store goods or containers for a number of ‘free’ days, after which charges are applied.
As
an example, let’s say a container is being shipped from a supplier in China to
a port in Amsterdam. The port normally allows 7 free days of storage, after
which they will start charging.
Detention on the other
hand is a charge that can be enforced by a transport provider for not returning
an empty container to a container yard or port after an agreed time.
As an example, if the
buyer of goods takes a container to their factory for 14 days to unpack, and
the shipping port allows just 10 days to return the box, then the shipping line
will be charged ‘detention’ for 4 days.
The main difference
between demurrage fees and detention fees is that demurrage fees are charged
when a container is still full and under the control of the shipping line whereas
detention charges, on the other hand, occur when the buyer holds on to a
container outside the port beyond the specified free time given by the shipping
line.
In very simple terms,
demurrage charges relate to full containers while detention charges apply to
empty containers.
