Detention Calculation
In the shipping industry, detention refers to the charge incurred when a container or vessel is held beyond the agreed-upon free time for loading or unloading cargo at a port or terminal. Detention charges are typically imposed by the shipping line or container owner and serve as compensation for the additional use of equipment or space beyond the allotted time.
Detention calculation in the shipping industry can vary depending on several factors, including:
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Free Time: Most shipping lines provide a certain amount of free time for loading or unloading cargo at the port or terminal. This free time is usually measured in days and varies based on factors such as the type of cargo, the size of the vessel, and the specific terms of the shipping contract.
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Detention Rates: After the free time has elapsed, detention charges start accruing. Detention rates are typically expressed as a per diem (per day) charge for each container or vessel detained beyond the free time. The detention rate may vary depending on factors such as the size and type of container, the port location, and market conditions.
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Calculation Period: The detention period begins once the free time expires and continues until the cargo is fully loaded or unloaded and the container or vessel is returned to the shipping line or owner. Detention charges may apply on weekends and holidays, depending on the terms of the contract.
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Demurrage vs. Detention: It's important to distinguish between demurrage and detention charges in the shipping industry. Demurrage typically refers to charges incurred for the use of shipping containers or vessels beyond the agreed-upon time at the port, whereas detention specifically applies to delays in loading or unloading cargo at the terminal or depot.
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Exceptions and Waivers: Some shipping contracts may include provisions for exceptions to detention charges, such as delays caused by factors beyond the control of the shipper or consignee, like port congestion, labor strikes, or adverse weather conditions. In such cases, the shipping line or container owner may grant waivers or extensions to the free time or detention charges.
Overall, detention calculation in the shipping industry involves tracking the time that cargo or equipment remains at the port or terminal beyond the agreed-upon free time and applying the applicable detention rates to determine the charges incurred by the shipper or consignee. Proper management of detention can help minimize costs and optimize supply chain efficiency for all parties involved in maritime trade.