Demurrage, Detention and Per Diem Charges

International Shipping Fees

Demurrage, detention and per diem charges are terms used for additional fees that can be incurred when shipping internationally. While these terms are sometimes used interchangeably, they do not mean the same thing. Similar or not, no one wants to receive a bill listing additional charges that were not accounted for. So what’s the difference among the terms? How can you avoid incurring additional charges?

Demurrage

This is a charge that is usually added on by steamship lines and airlines for use of their shipping containers at a facility. This fee is intended to discourage the use of the carrier’s equipment for storage purposes and to compensate the carrier for the use of their equipment. A particular number of free days are allocated and as soon as they end, freight services start charging demurrage. It is important to note that demurrage can sometimes increase by the day.

Detention

Detention is incurred when equipment is used beyond the stipulated free time by a carrier. It is also charged in domestic trucking when excess time is used for loading and unloading cargo. This charge is billed per hour by the trucker or service provider.

Per Diem

Many people use per diem interchangeably with detention and demurrage which can be confusing. Per Diem applies to cargo that leaves an arriving terminal or departing terminal and is charged until the equipment is returned to the terminal. Carriers give a certain number of free days before per diem is charged.

Charges and the number of free days are dependent on the carrier themselves. So it is important to understand these charges and how they are incurred before shipping your cargo. At 1 Stop Pack N Ship, our friendly staff will be happy to advise you on how these charges can be avoided. Give us a call today!