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Demurrage is a fee charged by a carrier or transportation provider when cargo is not picked up or unloaded within the agreed-upon time frame, causing the vessel or container to remain idle at the port or terminal.
Demurrage refers to the extra charges incurred when goods or containers are not removed from a port or terminal within the allotted time, typically due to delays from the consignee. These fees are meant to incentivize quicker handling and to cover the cost of keeping the cargo at the port longer than planned. The charges vary depending on the carrier, the type of cargo, and the duration of the delay.
Demurrage works by charging fees for containers or goods that stay at the port longer than the agreed-upon free time. This fee can help encourage faster unloading and pickup, reducing bottlenecks in the supply chain. By accounting for this cost, your business can avoid unnecessary delays, streamline operations, and maintain better control over logistics expenses.
Buske Logistics is a Top 40 3PL with over 35 warehouses across North America, specializing in warehousing, transportation, and value-added services. We provide tailored logistics solutions serving major Fortune 500 companies.
Demurrage is important because it helps keep cargo moving efficiently and prevents congestion at ports or terminals. If goods are not picked up on time, it can cause delays in the overall supply chain, which may lead to additional costs for everyone involved.
For example, if a shipment is delayed at a port for several days due to clearance issues, demurrage charges are applied to cover the costs of storing the container during the extra wait. This ensures the timely movement of goods and helps avoid delays that could affect other shipments.
