What is Demurrage?
Demurrage is a storage fee for containers that are left at the port or rail yard after the last free day. This fee is charged per container per day until the container is picked up.
What results in demurrage charges?
A failure to abide by the rules agreed to in a charter agreement can result in demurrage charges. This is especially true in the case when a charge is payable to the owner of a chartered ship on the failure to load or discharge the ship within an agreed time period. When a ship reaches its destination location, there is usually an allotted time for delivery to be taken and for receipt by the warehouse. This time is usually no longer than 3 days.
How do you know who has to pay demurrages?
To understand the responsible party for the delay, a penalty is assessed against a consignor, consignee, or other parties who are considered responsible for any delay in loading or unloading a shipping vessel. Other factors that can play into a delay in loading or unloading, may also stem from any undue detention, usually over 48 hours of the transportation equipment. This is also known as detention charges.
How much are demurrage charges?
The cost of demurrage charges vary, depending on carriers, terminals, and contractual agreements, however, they tend to be anywhere between $75 to $300. After several days, the charges can grow to more significant amounts.