Here is an example to demonstrate how detention and demurrage charges are calculated:
A container is discharged off a ship on the 5th of December; the concerned importer takes the release of the cargo from the port on 15th December. He returns the empty container to the concerned depot on 22nd December.
Demurrage free days offered by the shipping line = 7 days
Detention free days offered by the shipping line = 10 days
Free days at port = 3 days
In this case, here’s how the demurrage charge will be calculated:
On the 15th of December, the container would have been in the port for a total of 11 days. In the above-mentioned scenario, line-free days for demurrage will expire on the 11th of December.
11 days dwell time – 7 free days = 4 days more than the allowed limit
Hence, the shipping line will charge the consignee a demurrage charge for 4 days from 12th to 15th December.
Here’s how detention charge will be calculated:
The full container moves out of port on the 15th and let’s assume that the consignee returns the empty container of on the 22nd of December.
Detention free days = 10 days so the container can be returned till the 24th of December. But as the consignee returned the empty container on the 22nd of December, detention charges won’t be applied.