What is Detention and how is it not Demurrage?

We discussed demurrage in the previous week, and went into detail about why you are charged, how much you may be charged and what the process is. But if that is demurrage, what is detention in logistics terms? That is easily explained, read on.

What is Detention?

The process of a container arriving at the destination port or terminal and bring cleared is simple. Upon clearing through customs, the container especially in the event of a FCL container shipment, involves the container being sent to the consignee. In such an event, the consignee is given x number of free days after the container is either picked up or delivered to the desired address to be unloaded and returned to the operator. When the numbers of days have elapsed and if the container (full or empty) has not been returned, detention fees are levied to you.

Detention after Import of Container

In other words, Detention is charged when the consignee is in possession of the container outside of the port/terminal/depot after the allocated or agreed upon free time has lapsed.

Detention for Export Container

In such an event, it is when the container has been dispatched or been picked up for loading of cargo and when the container is only loaded onto the vessel after the agreed or allocated time has lapsed.  Typically, a consigner is allocated 5 days of free time for picking up and loading the cargo, and then returning the container to the port and loaded onto the vessel. If this isn’t done in the allocated time and if the container is still considered in the possession of the consignee, then detention fees will be levied.

What is the difference between Detention and Demurrage?

The different between detention and demurrage in logistics essentially falls in line with whether the container(s) in question are inside or outside the port. If they are inside when the allocated free day expire then it is considered demurrage, whereas if the container(s) falls in the possession of the consignee and is outside the port, then it is considered as detention. Whilst this may be confusing, if you take the scope of the matter as the port in question, you should be decipher which type of charge is relevant.

What is Per Diem?

The term “per diem” is often used interchangeably with “detention”; they are both used when a container is late to be returned to the port.