The difference between FREE DEMURRAGE,FREE STORAGE and FREE DETENTION

1.DEFINITION 

Free port storage 

The free storage days are counted from the time the container is unloaded at the terminal until it is removed from the port terminal. This period of time is limited, why? Because the terminal has limited storage space, take the Port of Busan in South Korea as an example. In 2019, the Port of Busan's container throughput was more than 20 million TEUs, but it was impossible to store that many containers at the same time, so the terminal requires importers to remove containers during the terminal's storage period. 
This free storage period is usually 3 to 7 days, and can be 10 days or more if longer. However, there are also consignees who cannot pick up the container on time due to documents, finances, contracts, etc. In this case, the container will be stopped at the terminal, which will cause the terminal to be full. In order to avoid this phenomenon and encourage importers to pick up the goods as soon as possible, charges will be applied to containers that exceed the free storage period, such charges are generally called port storage charges. For some small countries, because storage space is very limited, the port storage fee is very expensive.

Demora Gratis(Demora gratuita)

Demurrage free days means the period of free use of containers at the terminal. The number of container free days from the time the container is unloaded at the terminal until the container is removed from the terminal.

Free Detention

The period of free use of a container outside the terminal. This is the number of days counted from the time the consignee picks up the container at the terminal until the consignee returns it to the container yard specified by the carrier. If the free use period is exceeded, the shipping line will charge a demurrage fee, normally the free dienage is 7 days, depending on the shipping company's regulations.

 

Free time

Free time: equals FREE DELAY + FREE DETENTION. These two free periods can be freely assigned by customers. For shipping lines, the free days of container use in the terminal and outside the terminal are actually the same. If your importer has free demurrage and free dockage requirements, be sure to confirm these issues in advance. The length of free time depends on each carrier, the most common being 7+7, which means free demurrage 7 days + free dockage 7 days.

 

2.DIFFERENCE

Time and charges for free demurrage and free detention are controlled by the shipping company.
Free time and storage charges are controlled by the port terminal, as the port use rights are owned by the terminal.

Written by Vivi