Shortened as D&D, demurrage and detention are often linked together when shipping. Let’s understand them in detail.
Detention and demurrage are additional surcharges, paid when you exceed the number of days allotted for use of the container – called ‘freetime’ or ‘free days’.
When your container arrives at the port, shippers must ensure that it is returned to the carrier within the assigned freetime. If they fail to do so, carriers or shipping lines (who own the container) collect a late fee, called demurrage and detention. It is charged on a per-day basis.
D&D charges are levied to compensate the shipping lines for extended usage of containers by shippers, avoid congestion in the ports, urge the shippers for faster turnaround times, and free up equipment quickly.
Now, most people confuse them as a single charge; however, both are separate costs that differ slightly. Here’s how:
Demurrage vs detention in container shipping
- Demurrage: Charge levied for use of container/s (usually full) inside the terminal beyond allocated free days – from when they’re unloaded from the vessel until picked up.
- Detention: Charge for use of container/s (usually empty) outside the terminal beyond allocated free days – from picking them up from the port to returning them back.
What causes demurrage and detention charges?
The primary cause for these surcharges is due to delays in shipping or supply chain. This can be caused by:
- Missing or incorrect documentation
- Bad weather
- Port congestion
- Unavailability of equipment (forklifts, trucks, chassis, etc.)
- Problems in customs clearance
- Cargo inspection
- Rolling of containers
- Inefficient cargo drop-off or pick-up
- Overstay at terminal or port
- Failure to adhere to agreed-upon timelines
Do note that demurrage and detention costs are present during both import and export.
Who is responsible for demurrage charges?
This depends on whether we’re considering the import/export scenario.
- When exporting, if the exporter fails to load the container into the vessel within the stipulated number of free days, the consignor/sender pays these charges.
- When importing, if the importer fails to pick up the container/goods within the allocated free days, the consignee/receiver is responsible for paying these costs.
Now, the main question is, do you need to pay extra D&D charges every time you import or export the cargo? Well, that depends on the freetime you have.
Shipping lines, carriers, and port authorities understand that unpacking freight and returning containers takes time. So, they allow shippers certain days to carry out these activities without levying any charges. These allocated days are called standard free time, free days, or simply, freetime.
On average, shipping lines offer 3-6 free days before detention and demurrage charges kick in.
When booking with Maersk Spot, we show you the number of free days (freetime) offered, along with the price details to maintain transparency.
Ideally, shippers should be able to pick up the containers, unpack cargo, and return empty containers back to the port – all within the allocated freetime offered by the carrier. The problem starts when unexpected delays clog your supply chain, and you end up stretching beyond your allocated freetime.
If you are unable to return the container within the freetime allowed, you have to pay D&D charges. It can either be when:
- Your container took too long to be picked up from the port, i.e., demurrage charge.
- You took too long to return the container to the port, i.e., detention charge.
D&D charges vary by container size, type, and location, and are calculated on a tier-based structure depending on the number of days involved. Despite starting at relatively small amounts, as each pricing tier is reached, the per-day charge will increase, potentially leading to hefty costs.
How are D&D charges calculated?
Maersk demurrage and detention charges are calculated per day beyond the allocated free time.
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Demurrage charges
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Detention charges
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Demurrage charges
(No. of days beyond the freetime the container is inside the terminal/port)
X
(Per diem demurrage charge)
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Detention charges
(No. of days beyond the freetime the container is outside the terminal/port)
X
(Per diem detention charge)
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For a more precise idea, use the Maersk Demurrage & Detention calculator. Simply log in to your Maersk account and enter your shipment number into the ‘Import Demurrage and Detention’ widget.
Now, we know that all of this can be overwhelming, but not when you ship with Maersk.
Minimize your D&D surcharges when shipping with Maersk. At the time of freight booking or even mid-journey, you can opt for extra freetime at minimal charges – without worrying about piling up demurrage and detention.
How does Maersk Freetime Extension work?
Our Freetime Extension feature allows you to extend the number of days you can keep your goods in Maersk container/s after pickup from the port, beyond the standard free days.
- You can take a freetime extension for a specific shipment or all your shipments when booking online.
- After departure, you can also add freetime up to 10 days prior to arrival of the shipment at the destination port.
- Our support team will help you pick the correct number of days for extending your freetime for your shipment.
Why opt for a freetime extension?
Besides the primary benefit of decreasing your D&D costs by up to 80%, extending your freetime from the Maersk.com portal offers you a lot more:
- Visibility into the expected D&D charges related to your shipment
- Predictability of your shipment costs for effective budgeting and planning
- Flexibility to add freetime at different stages of the journey, even after booking
You can purchase Freetime Extension as a value-added service directly from Maersk.com.
