Detention and demurrage in container shipping

Transportation of goods from one point to another by ships is one of the most convenient methods preferred by many companies. Container systems that are relevant at this point in time have significantly simplified the process of transporting goods. Such transportation is the main activity of shipping lines represented by companies whose ships move along strictly marked routes according to a previously developed and agreed schedule for admitting ships to ports. If necessary, you can rent a container from such companies designed for storing cargo while the vessel is moving to its destination.

All shipping lines, specializing in the carriage of goods, indicate their terms of freight, we are talking about the provision of a vessel. At the preliminary stage of planning, the time of stay of goods in the port, on the ship and after shipment is calculated. If the indicated storage and transportation periods have been violated, then the terminal perceives this action as a violation of the terms of the contract, which leads to the presentation by the counterparties of a forfeit in relation to the shipping line. Types of forfeit: demurrage and detention.

What is demurrage?

The term is derived from the French "demurrage", translated as "delay" comes from the verb "demeurer", it can be translated as "stay in place." A container with cargo can stay in the port for a certain time, primarily necessary for the implementation of customs operations. The parties themselves negotiate the duration of the cargo stay in the port, it is important to note that different parties can agree on different times.

Within the specified period, the company responsible for the transportation, represented by the shipping line, undertakes to carry out all actions after which the cargo enters the ship and is transported to the specified point. If the agreed deadline has been violated, then the port representatives can legally put forward claims to the transport company related to a penalty, which is commonly called demurrage. If the reason for the actual violation of the terms was the actions or inaction of the owner of the cargo, then the shipping company may demand compensation for the damage caused by the excess of the period of stay of the cargo in the port.

The term in question is actively used in the trade sector. There it is interpreted with a similar meaning, it is customary to understand it as compensation for losses caused to the company responsible for the transportation due to the downtime of the court over the time specified in the content of the current legislation and presented in the content of the contract. In other words, demurrage is the payment for the presence of cargo or a vessel in the port in excess of the period specified in the agreement between the parties.

The amount of demurrage depends on the amount presented in the agreement between the parties. If the terms of the agreement do not specify a specific amount, then its calculation is carried out at the rates in force in this port. If the port has not indicated a specific amount based on the practice of using demurrage, then the penalty is calculated taking into account losses.

What is Deception?

The term is derived from the French "detention", translated as "delay". This concept can be viewed from two positions. In the first case, we are talking about the period when the owner of the goods has the right to use the leased capacity outside the port. The calculation of this period begins when the goods have been sent from the port terminal and ends when they returned to the port without cargo. In most cases, the term is limited to a few days, a limitation of several weeks is allowed, for this you need good reasons.

The cost of the baby is included in the amount paid by the owner of the cargo to the company responsible for transporting it. It is determined through a discussion between the interested parties and entered into the contract. If the indicated deadline has been violated, then this is the basis for the nomination of a penalty, that is, detenshena. In general terms, we are talking about providing monetary compensation to a company that transports goods for the fact that it cannot profit from a container that is not returned on time. In other words, the culprit of the delay assumes financial obligations related to the payment of additional time.

The content of the contract indicates which of the parties undertakes the obligation to pay the forfeit. The amount of compensation, if it is not presented in the content of the contract, is calculated with reference to the rate or the damage incurred in financial terms.

Comparison and conclusion

In practice, the two terms are treated in the same vein, even with a clear difference. It is important to understand that demurrage is considered as the storage period of the cargo, if this period is exceeded, then one of the parties must reimburse the penalty. A cub is interpreted as the time of using the container at the time of its being on the ship, if the time is exceeded, then one of the parties undertakes to compensate for the losses incurred.

Many refer to these concepts as penalties. However, this approach is incorrect. It is customary to understand a fine as a separate type of criminal or administrative punishment resulting from the commission of unlawful acts. Violation of the terms of the contract leads to civil liability, which is considered in a different legal field. The main purpose of forfeits is to compensate stakeholders and prevent repeated violations of the terms of the contract in the long term.

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