Understanding Ground Rent, Demurrage and Detention

shipping warehouse

Using shipping lines to ship goods overseas has a lot of associated terminology. Some of these terms can end up as charges on a shipping bill. Understanding what these terms are and what they are applied for can help you to avoid these types of charges in the future.

Demurrage: Charges for Full Containers

Demurrage is charges that are levied for shipping containers that have cargo in them. There are two types of situations where full containers can be charged demurrage:

  • When you are exporting goods shipping lines will give you a set amount of days in which you need to have your filled container loaded onto your ship. If you need to delay shipment of the container for any reason and it is not loaded onto the vessel, then you will be charged demurrage. This charge is typically applied by the day until the container leaves port.
  • When cargo arrives at its destination the person accepting the cargo will be given a certain amount of days in which to get the cargo. If, for any reason, the cargo is left in the hands of the shipping line for longer than the grace period, demurrage will be charged. Again, this is typically charged daily until the cargo is picked up.

Detention: Charges for Empty Containers

Detention is charged when empty containers are left in the hands of a shipping line. Like demurrage, these charges can be applied for different situations.

  • Shipping lines typically give people shipping goods out an empty container to load. When the container is picked up to be loaded, there will be a specific return date that the full container needs to be returned to the shipyard by. If the container is not returned, then detention will be charged for the days that the container is not returned. This can be a daily charge, just like demurrage.
  • When cargo is received at a port, the shipping line will hand the cargo container over to the party that is receiving the cargo. A grace period is given by the shipping line to have the empty container returned. If it is not returned b that date, then detention will be charged. This can be charged daily until the container is returned to the shipping line.

Ground Rent: Charges From the Port

Unlike detention and demurrage, ground rent is charged by a warehouse at the port that is holding a container. There are several reasons that this could happen:

  • Customs issues that require the container to be inspected
  • Empty containers waiting to be filled or that are not booked to be filled that need to be stored by shipping lines.
  • Full containers who’s loading has been delayed for by the shipping line for any number of reasons.
  • Containers that are awaiting a transshipment pickup.
  • Containers with legal issues that are being impounded by law enforcement.

To avoid these charges, consider using experts who are familiar with all of the ins and outs of the shipping industry like the Cratex group. Contact us with any questions about transloading services.