What is a demurrage charge?
Demurrage charges are fees incurred when a container remains within a terminal beyond the allocated free time period. This charge is typically paid by the merchant or shipper for the extended use of the container at the terminal.
Who is responsible for paying demurrage charges?
Demurrage charges are usually imposed by the terminal or port authority where the containers are stored. The responsibility for paying these charges generally falls on the shipper, who owns the containers and has control over the shipping process.
Can you provide an example of a demurrage scenario in shipping?
Certainly! Consider a scenario where a laden container is not picked up from the destination terminal within the allotted free time. For instance, if the free time is 7 days and the container is picked up on the 12th day, demurrage charges will apply for the 5 calendar days beyond the free period. Similarly, detention charges may apply if the empty container is not returned to the port within the specified free time after unloading.
How long is the free demurrage period typically granted by carriers?
The free demurrage period can vary significantly depending on the carrier and the specific trade lane. Commonly, carriers may offer around 7 days of free time, after which demurrage charges will start accruing. It’s important to note that the duration of free time and the rate of demurrage can differ from one shipping line to another and may also depend on the contractual terms agreed upon by the parties involved.