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.
Let’s assume:
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.
