Meaning of “demurrage”
A French word “demurrage” means a delay or a downtime. According to the rules, every container can stay in port free of charge only for a specific period. During this time, a shipping line must make all the necessary documents and send the loads further following the route. Port’s owner checks whether everything is done accordingly. A fine that a shipping company might have to pay is called “demurrage”. Later, sanctions for inappropriate customs clearing of the terminal move to the container’s owner.
Meaning of “detention”
Container use time outside a port is also strictly regulated. Cargo receiver must return an empty container to a shipping line within a definite period of time. It is necessary for following the regime of ship traffic and load transportation between ports. Violation of the conditions leads to a penalty called “detention”. Either a transportation company or a cargo receiver has to pay this fine. The levels of responsibility of all members are written in the agreement.
An organizer of sea transportation has a right to set additional free period of container use that is not included in demurrage and detention. Penalty system can spread on sea, river, railway, air and automobile vehicles.