When it comes to shipping, people dealing in the trade at times may get charged with unexpected bills. Many a time traders are not only surprised to see these bills but they also don’t know what they are being charged for. One of those confusing bills includes the ‘demurrage charges’.
Unclear about why one is charged with a demurrage fee? Confused about who is responsible for that? Don’t worry as this article will explain every necessary detail and will provide tips to avoid these bills.
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When it comes to container shipping, demurrage is quite a significant term as it can often lead to financial losses, and in some cases, the traders have to abandon the container as the fee charged is more than the actual price of the container. So it is extremely necessary to know about these charges before importing or exporting goods.
While making agreements in trade, a specific time period is set in which the shipper is supposed to use the container for packing or unpacking of the goods. If the shipper still has to use the container after the free days time period is over then the demurrage fee will have to be paid for the extra days.
In the case of imports, the ‘Demurrage fee’ is charged by the shipping company to the importer if he/she fails to empty the container or move it out of the port for unpacking within the agreed free timespan which is often 6-7 days. If the loaded containers can’t be shipped within the given free time due to non-carrier issues, then export demurrage is charged. The fee is applied for all kinds of vessels that are:
We all know that it is the shipper/Consignee who is the receiver of the container from the port to load or unload the products. He/she is also responsible for preparing the documentation. Everything needs to be done carefully in the specified time period. Any delay in the process could cause problems and disturb the whole process which could result in a penalty for the shipper. We have discussed above that demurrage fee is charged if the shipper uses the container beyond the free allotted time period and the fee has to be paid if the shipper has to
The demurrage fee is different for different types of cargoes. For instance, the amount may vary depending on if the cargo is dry or reefer. These charges increase with the addition of a new day. Therefore, it is very important for the dealers to have a prior complete knowledge about the allotted free time. But not just this, their preparation for customs related procedures must not be undone.
In case of imports, if a container reaches the port on the third of a month and is given a seven-day free stay including the day of discharge and the shipper uses the container till the tenth of that month then he would be charged with demurrage for two days with a rate fixed by the company.
The risks of being charged with the demurrage fee can be averted by following a proper plan and schedule. However, more often than not, it is difficult to anticipate delays. Once in a while, the delay is brought about by some unanticipated conditions including
It is essential for the shippers to have full information with respect to the lay timespan limit so as to avoid any financial misfortunes.
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