How much does demurrage cost?
The cost of demurrage charges vary depending on carriers, terminals, and contractual agreements. However, they tend to be anywhere between $75 to $300 per container/ per day. After several days, the charges can grow to more significant amounts.
How is demurrage calculated?
In the calculation of demurrage amount payable to shipowner, demurrage rate is multiplied by the number of days or part of day in excess of the agreed laytime. For example: Total Laytime Allowed 11 days. Demurrage Rate $60,000 per day pro rata (PDPR)
How much is demurrage charges in India?
Demurrage charges will be levied from 25.8. 2009 onwards on the cargoes lying beyond 30 days at four times the highest existing demurrage i.e. Rs. 75.00 per tonne per day or part thereof charged under Section 3.1(B) Chapter III of Scale of Rates working to Rs. 300.00 per tonne per day or part thereof.
What is the difference between per diem and demurrage?
Demurrage is charged when containers are still full and under the control of the shipping line, and have not been cleared through customs or picked up by the consignee. Per Diem: A detention fee where a fixed rate is charged per container per day until the equipment is returned to the port.
How do you avoid demurrage charges?
Tips to Avoid or Reduce Demurrage Charges
- Pre-clear your cargo and issue delivery instructions to your inland carrier in advance.
- Have a trucker “back-up” plan.
- Request extended free time.
Who is demurrage paid to?
By extension, demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading. Officially, demurrage is a form of liquidated damages for breaching the laytime as it is stated in the governing contract (the charter party).
Who is liable for demurrage charges?
The shipper is generally responsible for demurrage charges, but the consignee also may be legally obligated to pay, depending upon who was at fault for the delay and which party was contractually responsible to pay freight or other charges.
Who is responsible for demurrage charges?
Only the owner of the goods or person entitled to the goods is liable to pay storage or demurrage charges to the port trusts and not the ships or its agents known as steamer agents, the Supreme Court has ruled in a judgment that settles a long-standing conflict within the shipping industry over the matter.
Who is responsible for paying demurrage charges?
Is demurrage a fine?
Demurrage charges are effectively penalty charges. They are applied to all types of vessel whether it be in a port, feeder terminal or container yard. The charges are applied after the free allotted time has run out.
What is demurrage free time?
“Free time”: the period of time offered by the Carrier to the Merchant free of charge, covering both demurrage period and detention period, beyond which additional charges such as, but not limited to demurrage and detention charges, will be due to the Carrier. …
What causes demurrage?
Although, the most common reasons of demurrage are trigged by a shipper’s actions: Delay in payment. If the shipper paid for only part of a shipment, the vessel can refuse to release the freight until paid in full. Any delay in payment will lead to cargo detention at the port, which in turn causes demurrage charges.
What does demurrage charges mean?
“Demurrage is a charge levied by the shipping line to the importer in cases where they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days.”. Demurrage charges can vary country to country as well as by carrier.
What do demurrage and per-diem fees mean?
Demurrage, detention and per diem charges are terms used for additional fees that can be incurred when shipping internationally. While these terms are sometimes used interchangeably, they do not mean the same thing. Similar or not, no one wants to receive a bill listing additional charges that were not accounted for.
What is demurrage and detention?
Definition: Demurrage & Detention. Per definition, Demurrage & Detention are a matter of allowed free-days, determining the number of days a shipper can use the container for free.
What does detention charges mean?
Detention is a charge that a carrier will assess if the time that was allotted to pick up a freight load or to drop it off is exceeded. This means that the carrier is not actually moving like they should be and may be made late for other pickups or drop-offs along the route.