What is Demurrage?
Demurrage is a fee that is charged by a terminal operator or port authority when a container remains at their facility beyond the agreed-upon time period, or past the "Last Free Day". In the United States, demurrage fees are typically charged at ports and rail ramps, and they are intended to compensate the terminal operator for the use of their facilities and equipment, and to encourage the timely removal of containers from the port.
Demurrage fees are typically charged on a per-day basis, and the specific demurrage rates that are charged by a terminal operator or port authority may be based on a variety of factors, such as the type of cargo, the size of the container, and the location of the facility. In some cases, demurrage fees may be higher during peak periods or in situations where the terminal operator is facing constraints on their capacity.
The specific terms and conditions for demurrage fees at U.S. ports and rail ramps may vary depending on the specific facility and the terms of the contract between the shipper and the carrier. However, some common factors that may affect the calculation of demurrage fees include:
The length of time that the container remains at the port or rail ramp: Demurrage fees are typically charged on a per-day basis, and the longer the container remains at the facility, the higher the demurrage fee will be.
The type of cargo: Some types of cargo, such as hazardous materials or refrigerated goods, may incur higher demurrage fees due to the additional handling and storage requirements.
The size of the container: Larger containers may incur higher demurrage fees due to the additional space they occupy at the facility.
Any additional services or facilities that are used: If the shipper or consignee requires additional services or facilities, such as refrigeration or cargo handling, these may be subject to additional charges.
For more information about demurrage fees at U.S. ports and rail ramps, you can refer to the official website of the Federal Maritime Commission (FMC), which is the U.S. government agency responsible for regulating the maritime industry. The FMC's website provides information about the rules and regulations governing demurrage fees in the U.S., as well as guidance for shippers and consignees who are seeking to avoid or minimize these fees.
How much are demurrage fees?
It is difficult to provide specific estimates of demurrage fees, as they can vary significantly depending on a number of factors, including the length of time that the container remains at the port or terminal, the type of cargo being shipped, the size of the container, and any additional services or facilities that are used.
On average, these fees tend to range from $75 to $300 per container per day. However, it is not uncommon for these charges to accumulate significantly over time, potentially resulting in significant expenses for shippers and consignees.
For example, if a shipper has 5 containers that are not removed from a terminal within the agreed-upon time period, and each container incurs demurrage charges of $75 per day for 10 days, the total demurrage charges could amount to $3,750. It is important for shippers and consignees to be aware of the potential costs of demurrage and to carefully manage the timing of their container removal in order to avoid these additional fees.
It is important for shippers and consignees to be aware of the potential costs of demurrage and to carefully manage the timing of their container removal in order to avoid these additional fees. It may also be helpful to negotiate the terms of the demurrage fees as part of the contract with the carrier or terminal operator, in order to establish clear expectations and minimize the risk of unexpected charges.
In general, it is advisable for shippers and consignees to be aware of the potential costs of demurrage and to plan their shipping and logistics activities accordingly in order to minimize the risk of incurring additional fees.