3 Types of fees that cause confusion in international trade

In international trade, there are different types of surcharges. There are 3 types of fees that often confuse people: #DEM, #DET and #STORAGE. So what is the difference between DEM, DET and STORAGE fees? Let's find out with PEACE through the following article:

DEM is the charge for storing the container at the yard collected by the shipping line, DET is the fee for storing the container at the warehouse collected by the shipping company. The STORAGE fee is the charge for storing containers at the yard, collected by the port directly from the customer.

DEM and STORAGE relate to the time the container is in the port. DET, on the other hand, relates to the shelf life of the container at the consignee's warehouse or factory until it is returned empty to the shipping line.

STORAGE is the port's storage fee, which is collected by the port authority from the shipping lines for the exploitation and use of the berth. Then the shipping lines collect the freight owners the fee for storing the container at the yard (understood as vehicle rental fee - container & yard rental fee) charged per container unit. This fee is collected by the port authority according to the prescribed tariff when the container is still within the port yard and outside the allowed free period.

1. For imported goods:

- DEM (Demurrage Charge) is the fee for storing containers at the yard, collected by shipping lines from customers. DEM and STORAGE fees are charged when the containers are stored at the yard and under the control of the shipping line when the consignee has not come to pull the goods to the warehouse even though the free time has expired. DEM and STORAGE charge period starts from the overdue date to the date the goods are taken out of the yard.

DET (Detention Charge) is the fee for storing containers at the warehouse or factory of consignee. In other words, the DET fee is applied when the container is towed out of the port but not returned within the time limit specified by the shipping line. DET fees help reduce container turnaround times and facilitate more efficient shipping.

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DEM, DET AND STORAGE FEES

2. For export goods:

- DEM fee is charged when the container is unloaded at the yard/port too early, before the time specified by the shipping line. Depending on the shipping line, the DEM fee will be charged from the date of delivery to the date of departure minus the number of free days. You will have to pay DEM and STORAGE fees in case the ship is late to stay at the port until the next trip or the customer's warehouse does not have enough space to store, etc.

- The shipping line gives the shipper a certain time to pick up the empty container and drag it to the warehouse or factory to pack and then unload the goods at the yard/port. If after the specified time, you do not return the container to the yard on time as on the booking but the container is left at your warehouse, you must pay the container storage fee (DET).

- Each shipping line will have a free time (calculated by calendar day) for customers to store containers at the port's yard and store containers at different customers' warehouses or factories.

3. What is Free Time?

Free Time is also known as Combined DEM & DET, that is, DEM and DET charging time is pooled. Because separating DEM and DET will be inconvenient and sometimes unfair to customers. When the shipping company gives you Free Time to help you balance the shipping process more smoothly.

- Free Time will help you balance the process of making goods more smoothly. In case it takes more DEM time to store the container at the port, you should choose Free Time, because the packing time is usually faster and the container can be stored in a safe yard at a low cost.

- Normally, shipping lines give Free Time from 7-8 days for normal containers and 1-3 days for refrigerated containers.

4. Some reasons for DEM and DET fees

  • Wrong information vouchers;
  • Late receipt of voucher;
  • Lost documents;
  • Customs clearance and inspection of goods is slow;
  • Slow release of cargo at destination;
  • Unable to reach the consignee.

Note:

  • Packing at the yard will not incur a DET fee.
  • DEM/DET fees have different fees depending on each shipping line.
  • DEM and DET fees are calculated based on the number of days overdue, the type and size of the container. Refrigerated containers often have this fee much higher than other types of containers.
  • DEM and DET free periods will be charged for all holidays, Saturdays and Sundays. In special cases, depending on the shipping company has flexibility for customers.
  • DEM and DET fees have different fees depending on different shipping lines.
  • You can apply for a free extension of DEM and DET if you fall into the following cases: shipping lines have a free policy, customer power such as monthly volume volume, relationship with shipping lines, etc.
  • Note when booking, no matter what contract you make in INCOTERM, you should also ask for DEM and DET free time fees at the port of loading and the port of discharge.

Hope the article gives you useful information! Thank you for reading the article!

If you still have difficulty distinguishing DEM, DET and STORAGE fees, please contact us for more specific advice.

If you have export needs and find out more details, please contact PEACE or contact phone number: 0911.529.168 (Ms.Lisa) Or visit the website to update more information: https://dichvulogistics.com.vn/

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