How are detention and demurrage charges calculated?

   Release date: 07/08/2022     Hits: 6389    Comment: 0    
Note: Here is an example to demonstrate how detention and demurrage charges are calculated:A container is discharged off a shi

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.


 
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