What is D&D (Demurrage & Detention)?
Although often confused, Demurrage and Detention are two separate charges, commonly found in import cases, and to a lesser extent in exports. In many instances, these charges become burdensome, causing customers to abandon cargo to avoid high costs.
Let’s break down the meaning, reasons for these charges, who imposes them, who is responsible, and tips to minimize Demurrage, Detention, and storage fees.
What is Demurrage?
Demurrage is a charge imposed by the shipping line to the importer when a full container remains in the port beyond the allowed free time before being picked up or unloaded.
This term is used when cargo is still inside the container, either due to delayed unloading (import) or delayed loading (export).
Example:
A container is unloaded from a vessel on January 1, and the consignee collects it on January 11.
If the shipping line allows 7 free days, the free time ends on January 7.
Thus, the consignee overstayed 4 days and will be charged Demurrage from January 7–11.
What is Detention?
Detention is charged by the shipping line when a full container has been taken out from the port within the free period, but the empty container is not returned within the allocated free time.
The term applies when cargo has already been unloaded, or before it is loaded.
Requesting Free Days
Companies can negotiate additional free days with the shipping line, often needing to specify whether it's for Demurrage or Detention, as each has different implications (before or after the container leaves the port).
Note that definitions of Demurrage and Detention can vary by port, so clarification is essential. Most shipping lines offer a combined free period, rarely split between the two.
Why Do Shipping Lines Charge D&D?
Containers incur costs related to storage, maintenance, leasing, and repair, which account for around 20% of a shipping line’s operating costs.
Like vessels, containers generate revenue only when in circulation. When a container overstays (e.g., 11 days), it sits idle and doesn’t generate income.
Thus, Demurrage and Detention charges serve as compensation for the unproductive use of the equipment.
5 Tips to Reduce Demurrage, Detention, and Storage Charges
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Ensure cargo is ready on time to avoid Detention
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Make use of the free time by preparing cargo before the empty container arrives.
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Understand customs procedures to minimize Demurrage and storage
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Work with experienced customs brokers, prepare documents in advance, and complete import clearance promptly.
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Use the expertise of a Freight Forwarder
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They can plan shipping, negotiate rates, find storage solutions, handle documents, and oversee admin tasks.
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Request detailed information on D&D and storage charges in quotations
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Ensure rates are clear per day and per container.
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Communicate proactively with all parties
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Keep everyone updated with schedules and requirements to avoid unnecessary delays.
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