Terms “demurrage” and “detention” in container shipping

An organizer of sea transportation has a right to set additional free period of container use that is not included in demurrage and detention. Penalty system can spread on sea, river, railway, air and automobile vehicles. Meeting deadlines is one of the main conditions of transporting loads in containers. Shipping lines distinctly calculate the routes, considering stops in the definite ports, lifetime of modules on the shops and in the logistic centers. Breaching the agreed duties is regulated by the terms “demurrage” and “detention”. Fines, based on the international freight rules, are paid with every hour of a delay. It is important to understand the difference of these concepts in order to avoid unexpected costs during container transportation.

Meaning of “demurrage”

A French word “demurrage” means a delay or a downtime. According to the rules, every container can stay in port free of charge only for a specific period. During this time, a shipping line must make all the necessary documents and send the loads further following the route. Port’s owner checks whether everything is done accordingly. A fine that a shipping company might have to pay is called “demurrage”. Later, sanctions for inappropriate customs clearing of the terminal move to the container’s owner.

Meaning of “detention”

Container use time outside a port is also strictly regulated. Cargo receiver must return an empty container to a shipping line within a definite period of time. It is necessary for following the regime of ship traffic and load transportation between ports. Violation of the conditions leads to a penalty called “detention”. Either a transportation company or a cargo receiver has to pay this fine. The levels of responsibility of all members are written in the agreement.