A SHORT OVERVIEW ON DEMURRAGE

Delays in shipping are commonplace and as a result, customers may incur a multitude of extra charges which they have not catered for. One such extra charge is the Demurrage Charge.

Demurrage is a charge levied by the shipping line to the importer in cases where they have not taken delivery of the full container and move it out of the port/terminal for unpacking within the allowed free days.

For a 20 or 40 ft dry container, demurrage usually kicks in from Day 6. In other words, the free time during which it is allowed to remain inside the port after discharge is 5 days. More the number of days a container remains in port, the more demurrage has to be paid to the carrier.

On the other hand, demurrage charges for reefer containers are more than the dry ones. Here, the first three days are free.

Demurrage can be caused due to some of the following 4 reasons:

• Consignee did not receive the documents in time for customs clearance.
• Documentation received by consignee is incorrect or missing.
• Cargo received was not as per the sales order
• Consignee does not have finances in order to clear the container in time

In conclusion, there are several charges involved in an ocean freight shipment and it is easy for a customer to get confused with the plethora of charges involved and the various places these charges need to be paid. Hence, he should be aware of such charges such as demurrage and take necessary steps to avoid the same.