October 16, 2023
Many Cross-Border E-commerce seller encounter detention and demurrage fees when their ocean shipments arrive at the destination port, but what do these two fees mean? How are they incurred? What are the differences between them? Today, We feel it's necessary to provide concentrated answers here to resolve everyone's confusion, avoid unnecessary expenses during ocean transportation, and ensure smooth freight delivery.
With Francesco Parisi Group’s more than 200 years of global shipping experience and strong logistics network, PGS CBEL has stable channel transportation and abundant last-mile delivery resources. We have long-term contract warehouse slots with multiple carriers and shipping lines. Our overseas warehouses are located across major countries in Asia, Southeast Asia, the UK, Germany, Italy, the US, Canada, etc. We provide professional, fast and secure logistics services for Cross-Border E-commerce sellers, ensuring safe delivery of goods!
• Free Demurrage
It refers to the free period allowed for using shipping containers, generally calculated from when the consignee picks up the container from the yard until it is returned. Fees will apply if this time is exceeded. The duration depends on different carriers’ regulations, usually 7 days. It can be extended by requesting when booking shipments, usually 14-20 days for high volume shippers with long-term contracts.• Free Storage
It refers to the free period containers can stay at the port terminal, starting when the container is discharged at the terminal until picked up. Demurrage fees will apply if this time is exceeded. An extension up to 7 days can be requested from the terminal but is usually difficult to get approved. The specific duration depends on the terminal's regulations.• Detention
Fees charged when the consignee fails to return the container within the Free Demurrage. It is collected by the carrier. Different carriers have different fee structures but usually a daily detention rate applies after the expiration of Free Demurrage. Therefore, in order to avoid detention fees, after the vessel arrives at the port, it is necessary to promptly complete customs clearance of the imports and arrange pick-up of the cargo, and return empty containers to the location designated by the shipping company in a timely manner. If shippers use their own containers (SOC), no detention fees will incur.• Demurrage
Fees for exceeding the free storage time, also called "storage fees", collected by the port. The rates increase progressively the longer the free time is exceeded, with higher daily rates applied for longer periods.How to avoid detention and demurrage fees?
1. Prepare customs clearance documents in advance
Different goods require different certificates. It is imperative to have all relevant documents ready before export to ensure cargo quality and product compliance.2. Reasonably plan cargo transportation
During cargo transportation, consult logistics company in advance regarding relevant policies and guidance, reasonably arrange shipping, discharging and transportation methods to ensure cargo arrives at destination in time, reducing or avoiding risks of incurring detention and demurrage fees.3. Understand shipping company policies
Get to know the shipping line’s free time allowance and detention/demurrage fee scales in advance. If customs clearance at destination port takes longer, apply for extended free time from the shipping line beforehand.4. Choose a reliable logistics company
Select a logistics company with good reputation and qualifications to ensure smooth cargo shipment and reduce potential risks.With Francesco Parisi Group’s more than 200 years of global shipping experience and strong logistics network, PGS CBEL has stable channel transportation and abundant last-mile delivery resources. We have long-term contract warehouse slots with multiple carriers and shipping lines. Our overseas warehouses are located across major countries in Asia, Southeast Asia, the UK, Germany, Italy, the US, Canada, etc. We provide professional, fast and secure logistics services for Cross-Border E-commerce sellers, ensuring safe delivery of goods!