Equipment charges and penalties
When an ocean carrier, such as MSC, contracts to transport your cargo from one location to another a key part of this agreement is, of course, the provision of the container itself.
The length of time you are able to utilise this equipment is typically defined in the terms of sale. Within this timescale a period of ‘Free Time’ is defined. The last thing you want is to be hit with unwanted extra charges, so it’s a very good idea to get to grips with this term quickly:
- Free Time – the number of days the receiver is allocated after a container is discharged from the vessel for the reasonable clearance from local Customs and the arrangement for pick-up. Typically, a reasonable Free Time period is deemed to be three working days – although this can of course vary from port to port and trade zone to trade zone so be sure to ask your local MSC contact for more information.
Should the container remain in your possession beyond the Free Time allocation, you will incur additional charges during this period – these charges come under the broad headings of ‘demurrage’ and ‘detention’.
- Demurrage – this is the additional charge for exceeding the Free Time at the discharging port’s terminal and is accumulated daily.
- Detention – these charges are applied to customers that hold MSC equipment outside the terminal longer than the agreed Free Time. It is accumulated daily until the container is returned to MSC.
Terminals and depots also have an interest to free up their ‘parking’ areas and bill a corresponding ‘storage’ or ‘quay rent’ charge.
As with demurrage, the port will define what is determined to be a reasonable period of time for the container to be ‘parked’ or stored on/at their facility. Any time beyond that risks incurring a charge. These charges vary considerably from port to port and between imports and exports, so take the time to avail yourself of the port-specific charges relevant to your cargo. Again, your local MSC office will be available advise you on this.
The charging situation can be different in specific countries, below their definitions
In the USA
- Demurrage - is the charge assessed on the containers that remain inside of a marine terminal for more than the given free time. This is the charge the terminal assess either directly or via MSC for the usage of his land.
- Detention - is the charge assessed for the usage of the actual MSC container past his free time while it is inside a marine terminal, a rail road or a container yard.
- Storage - is the charge assessed on the container that remain for more than the given free inside a rail road or a container yard. This is the charge the rail road and container yard assess either directly or via MSC for the usage of his land.
- Per Diem - is the charge assessed for the use of the actual MSC equipment past his free time outside of a marine terminal, rail road or container yard.
- Demurrage and Storage - are charges applied to containers that remain in the terminal exceeding the Free Time granted.
- Detention - is the charge applied to containers outside the terminal exceeding the Free Time granted.
- Storage – this charge applied after free time (if granted), for each container at the port terminal area.
- Demurrage - this charge applied after free time (if granted), for each container, before return it to MSC stock.
- Late pick up fee – this charge applied for dry containers after 6 days of using on top of demurrage charges.
- Detention – charge applied only to export cargo, from the moment the container it is received for stuffing until its arrival full at the terminal, if exceeds the free time previously given.