What is Drayage and Demurrage? A Comprehensive Guide

Delay is the fee paid to the owner of a chartered vessel for not loading or unloading the ship within the allotted time.

Transportation involves transporting

goods over a short distance, that is, moving freight in fractions from a port to a warehouse. The terminal will charge a delay fee if the container remains in port. This is basically a storage fee in port logistics.

Every day, there are several cases where charging is delayed. In addition to unplanned efforts, these delays often result in unexpected additional charges. One of the most common additional costs are delay and retention charges that result from the storage costs of cargo that remains in the port of discharge for too long or that has not returned to the warehouse. But what does too long mean? Before we venture to find that answer, let's try to clarify the terms “delay” and “detention”.

Because many people have difficulty understanding the difference between delay and detention and even what they mean, it's very frustrating to receive a transportation bill and not understand all the charges. Delay and retention can be an important factor in doing business when moving cargo between shipping ports. Not only can these charges be costly for the sender, but they can also result in delays. Overall, it can be a confusing and frustrating effort to deal with.

To that end, at Ocean Insights we have created a white paper that will provide shipping professionals with advice on how to manage and avoid delay and detention charges effectively. The shipping company charges delays per day and per container, from the date of unloading until the full container leaves the port or terminal for unpacking. Withholding is charged per day and per container from then until the empty container is returned to the warehouse designated by the shipping company. We'll explain how delays and retention are calculated, as well as the causes of these costly delays during the shipping operation. Not only is it important to understand how it's calculated, but it's also important to understand why shipping companies charge for detention and delay.

It's just as important that shipping companies charge these fees as it is for shippers to avoid them. Port congestion is a big problem when it comes to D&D rates and can have a huge impact both on the efficiency of the supply chain and on the amount you will have to pay in terms of retention and delay fees. In our white paper, we'll discuss the causes of port congestion and how it can affect your business. As anyone who works in shipping will tell you, arrest and delay rates are a hassle at best. Fortunately, there are steps you can take to help mitigate these expenses and avoid costly delays.

If you want to know how your company works. These delays can cause carriers to make additional transport trips and move empty equipment, causing congestion on roads leading to and from ports, Frese said. When you work with a proactive transportation provider like ContainerPort Group, you can take advantage of their pre-extraction services. Optimizing transportation is definitely a good thing when it comes to low delay and detention charges, Frese said. The fate of a carrier who is stuck in the middle of an unusually long port delay isn't good either. In such a situation, carriers face a lot of problems, such as dead spots, long waiting times and unpredictable delivery times for trucks.

Drayage and demurrage are two terms that are often used interchangeably but have different meanings when it comes to shipping goods by sea or air freight. Drayage refers to short-distance transport from one point to another within a port or terminal while demurrage refers to fees charged for exceeding an agreed-upon time limit for loading or unloading cargo at a port or terminal. Delay fees are charged by carriers when containers remain in port beyond their allotted time frame while detention fees are charged when containers remain at their destination beyond their allotted time frame. Both types of fees are intended to cover costs associated with storing containers beyond their allotted time frame such as storage costs, labor costs, etc.

Port congestion is one of the main causes of delays and detentions as it can lead to longer wait times for containers at ports or terminals due to limited space or resources available for loading/unloading cargo. Other causes include bad weather conditions, labor shortages or strikes, customs clearance issues, etc. At Ocean Insights we have created a white paper that provides shipping professionals with advice on how to manage and avoid delay and detention charges effectively. We'll discuss how delays and retention are calculated as well as strategies for mitigating these expenses such as working with proactive transportation providers like ContainerPort Group who offer pre-extraction services.

Overall understanding drayage and demurrage is essential for any shipper looking to move cargo between ports efficiently without incurring costly delays or detentions.

Lynette Cariño
Lynette Cariño

Total tv fanatic. Extreme explorer. General travel evangelist. Incurable student. Freelance music nerd. Typical beer lover.