What is DEM, DET? Distinguish DEM, DET and Storage fees in shipping

DEM DET là gì? What is the difference between DEM DET and Storage charge in the field of freight? These are issues that many people are concerned about. If you are also wondering these things or do not really understand the 3 types of fees DEM, DET, Storage, then follow the following article!

What is DEM? (Demurrage Charge)

In fact, many people have heard of DEM fees but do not really understand this fee. DEM stands for Demurrage charge, which means the fee for storing containers at the port's yard. This fee is collected by the shipping company.

https://samcovina.vn/dem-det-la-gi

In commercial chartering, charter is an ancillary cost representing damages liquidated as a result of delay. It occurs when the ship is prevented from loading or unloading the specified cargo during loading (see Carriage: under the Charter of the Parties). In the oil industry, it refers to the excess time required to discharge or load, as the case may be, beyond the allowable rest period. Laytime is the term used to quantify the amount of time allowed within which an activity is allowed to be performed. Demurrage used laytime less than allocated laytime (if any). Ship masters must provide a Notice of Readiness (NOR) for hire when the vessel has arrived at the port of loading or unloading. NOR notifies charterers that the vessel is ready to load or unload. The NOR date and time determine when the outage begins.

Relationship between DEM DET and STORAGE fees with exports

It can be understood that, DEM is the fee that the shipping company has to pay to the port. And to have money to pay, shipping lines will have to collect from customers. Money collected from customers is returned to the port by the shipping line with a separate agreement. This fee will be charged per container unit.

Find out what is Demurrage charge?

Depending on each shipping line, the specific policy of free time or days when storing containers at the yard may be different. Customers only have to pay the DEM fee after the free period has passed.

How to calculate DET for 1 container:

(Number of days customers keep the case – number of free days) x unit price for storing the container by day

Example of imported goods: On August 7, Customer A pulled the goods from the port to exploit, the shipping company specified that the DET free time was 5 days. Thus, guests will not be charged if they return the shells to the designated shipping company's yard from August 7-12. If the customer returns the case after 12/08, the customer will be charged $10 per day overdue.

In fact, customer A returns the case on August 16, so the number of days that customer keeps the case is 9 days, minus 5 free days, so the customer has to pay DET fee for 4 overdue days which is 4 x 10$ = 40$

Example of export goods: The shipping line issues a booking with an estimated departure date (ETD) of September 28, DET free time is 7 days. Thus, guests will not be charged if they take the shell from September 22-28, if it is taken earlier, the customer has to pay $ 10 for 1 day to keep the shell. Because customers need to close the goods soon, they should ask the company for a case on the date (Source: dhlogistics.com.vn)

Demurrage fee is divided into 2 types: fee for import goods and fee for export goods. Specifically:

For imported goods

If it is a dry container, the DEM fee will be waived in about 1-7 days. If it is a refrigerated container, the free time for DEM is shorter, from 1-3 days

The DEM charge period will start from the first day after the free expiration to the day you pick up the item.

The unit of charge for DEM is money/day/container, which depends on the type and size of the container.

For example: To better understand what the demurrage charge is for export goods, for example, you currently have an import shipment to Cat Lai port. This is a shipment of imported scrap steel and you get free DEM for 5 days, counting from the date of arrival of the ship. The information on the D/O will indicate the date of arrival of the ship and you will receive the goods on April 10, 2021. Thus, from April 10, 2021 to April 15, 2021, you will not be charged DEM. However, if after April 15, 2021 you have not received the goods, the shipping company will start charging. You will not be able to complete the documents to receive the goods until April 18, 2021. As such, you will have to pay DEM fees for days 16, 17 and 18. That is for 3 days and the fee is calculated by progressive accrual method.

For export goods

Dry container will be free DEM for 1-7 days and refrigerated container is 1-3 days.

Unlike imported goods, exported goods are rarely charged DEM, unless you clear customs late, so the goods are dropped and have to be shipped later. Or maybe for some other reason.

For exports there is a free time DEM

Example: You can clearly understand what demurrage is for exports through concrete examples. If you receive booking and information on booking, write ETD 10/04/2021 and closing time is 09h00 on 10/04/2021. Thus, you will be given 7 days of DEM by the shipping line, that is, 7 days before the ETD date, if you lower the container, you will be free of DEM. But if you downgrade earlier than the time in ETD, there will be a fee. Or more specifically, if you lower the container on 04/04/2021, you will get free DEM. Note, it is not recommended to do the subtraction because the shipping company will calculate April 10, 2021 as 1 day.

With the above information and examples, you must have a clear understanding of what DEM is. Next we will explain about DET fees.

What is DET? (Detention)

There are a lot of people who don't understand what DET is or confuse DEM and DET fees. DET is an acronym for detention charge

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