Demurrage vs. Wharfage: What's the Difference?
Edited by Sumera Saeed || By Sawaira Riaz || Updated on October 10, 2023
Demurrage is a fee for extended use of shipping containers beyond an agreed period. Wharfage is a fee for goods passing through a port.
Key Differences
Demurrage and Wharfage are terms primarily used within the shipping and freight industry, and both pertain to fees associated with shipping goods. Demurrage relates specifically to the prolonged holding or storage of shipping containers or cargo at a terminal. It's a fee imposed on shippers when they keep a shipping container beyond the allotted free time. Essentially, if you don't unload and return a rented container promptly, you'll incur demurrage charges.
Sawaira Riaz
Oct 06, 2023
On the flip side, Wharfage pertains directly to the movement of goods. Wharfage is the fee levied on goods as they pass through a port or wharf. This is more about the transit process itself, as opposed to the extended storage or holding of goods. Wharfage fees ensure that port operations, maintenance, and other associated services are funded.
Sawaira Riaz
Oct 06, 2023
While both Demurrage and Wharfage are tied to costs in the shipping world, the triggering events for each are different. Demurrage is a reactionary charge, applied when shippers don't adhere to timelines. In contrast, Wharfage is a more standard fee, applying to almost all goods passing through ports irrespective of timing.
Sawaira Riaz
Oct 06, 2023
These charges can have a significant impact on the total cost of shipping. Shippers must be well aware of potential demurrage and wharfage fees when planning their shipping and receiving operations. Both fees play a pivotal role in ensuring smooth operations within ports and shipping terminals.
Aimie Carlson
Oct 06, 2023
Comparison Chart
Pertains To
Extended storage of shipping containers or cargo
Movement of goods through a port or wharf
Sawaira Riaz
Oct 06, 2023
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Trigger
Exceeding the allotted time for container use
Standard fee for goods passing through ports
Sawaira Riaz
Oct 06, 2023
Purpose
Compensate for storage space and potential delays
Fund port operations, maintenance, and services
Sawaira Riaz
Oct 06, 2023
Incurrence
Reactionary based on non-adherence to timelines
Applies to almost all goods passing through ports
Sara Rehman
Oct 06, 2023
Impact On Shipping Cost
Can significantly increase costs if not managed correctly
Predictable, but can vary based on the port or specific goods
Aimie Carlson
Oct 06, 2023
Demurrage and Wharfage Definitions
Demurrage
A charge for holding shipping containers beyond the free time.
The company had to pay a high demurrage due to delays in unloading.
Janet White
Oct 06, 2023
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Wharfage
Charges for handling cargo at a wharf.
The wharfage at this port is higher due to its modern facilities.
Aimie Carlson
Oct 06, 2023
Demurrage
A compensation for detention in transportation.
The shipper paid demurrage for the extra days the cargo stayed at the terminal.
Sara Rehman
Oct 06, 2023
Wharfage
A fee for goods passing through a port.
The exporter included wharfage fees in the shipping costs.
Sara Rehman
Oct 06, 2023
Demurrage
A penalty for the late return of rented equipment.
The train company imposed a demurrage on the late return of railway cars.
Aimie Carlson
Oct 06, 2023
Wharfage
Fees associated with loading or unloading cargo at a port.
To reduce costs, the company found a port with lower wharfage rates.
Harlon Moss
Oct 06, 2023
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Demurrage
A fee for prolonged storage of goods at a port.
Due to customs delays, they incurred significant demurrage.
Harlon Moss
Oct 06, 2023
Wharfage
A levy for the use of a wharf's facilities.
Wharfage ensures the maintenance of port infrastructure.
Sara Rehman
Oct 06, 2023
Demurrage
A fine for slow freight movement or unloading.
The demurrage charges increased as the goods remained unclaimed.
Aimie Carlson
Oct 06, 2023
Wharfage
A tariff on cargo at docks or piers.
The imported goods had an additional wharfage cost.
Aimie Carlson
Oct 06, 2023
Demurrage
Detention of a ship, freight car, or other cargo conveyance during loading or unloading beyond the scheduled time of departure.
Sawaira Riaz
Dec 13, 2022
Demurrage
(shipping) the detention of a ship or other freight vehicle, during delayed loading or unloading
Sawaira Riaz
Dec 13, 2022
Demurrage
The detention of a vessel by the freighter beyond the time allowed in her charter party for loading, unloading, or sailing.
The claim for demurrage ceases as soon as the ship is cleared out and ready for sailing.
Sawaira Riaz
Dec 13, 2022
Demurrage
A charge required as compensation for the delay of a ship or freight car or other cargo beyond its scheduled time of departure
Sawaira Riaz
Dec 13, 2022
Wharfage
The fee or duty paid for the privilege of using a wharf for loading or unloading goods; pierage, collectively; quayage.
Sawaira Riaz
Dec 13, 2022
Demurrage
Detention of a ship or freight car or other cargo beyond its scheduled time of departure
Sawaira Riaz
Dec 13, 2022
Wharfage
A platform built out from the shore into the water and supported by piles; provides access to ships and boats
Sawaira Riaz
Dec 13, 2022
FAQs
Is demurrage a global practice?
Yes, ports worldwide charge demurrage for extended use of containers or holding cargo.
Aimie Carlson
Oct 06, 2023
Are wharfage fees standard for all goods at a port?
Yes, almost all goods passing through ports incur wharfage fees.
Sawaira Riaz
Oct 06, 2023
Can demurrage fees be avoided?
Yes, by promptly unloading and returning containers within the allotted time.
Sawaira Riaz
Oct 06, 2023
Can wharfage rates differ between ports?
Yes, rates can vary based on the port's facilities, location, and services.
Harlon Moss
Oct 06, 2023
What does wharfage primarily fund?
It funds port operations, maintenance, and associated services.
Sawaira Riaz
Oct 06, 2023
How can shippers reduce demurrage costs?
By efficiently planning unloading, managing paperwork, and timely container returns.
Aimie Carlson
Oct 06, 2023
Is wharfage applicable to passenger ships?
Wharfage primarily pertains to goods, but ports might have separate fees for passenger vessels.
Aimie Carlson
Oct 06, 2023
What triggers a demurrage fee?
Exceeding the free time allotted for using a shipping container or holding cargo.
Sawaira Riaz
Oct 06, 2023
Do all ports charge wharfage?
While most do, rates and practices might differ.
Sara Rehman
Oct 06, 2023
Are demurrage fees negotiable?
Typically, they're fixed but can vary based on volume or long-term relationships.
Janet White
Oct 06, 2023
Who typically pays the wharfage fees?
Either the shipper, receiver, or sometimes the shipping line, based on agreements.
Sara Rehman
Oct 06, 2023
Can demurrage fees exceed the value of the cargo?
Theoretically, yes, if the cargo remains unclaimed for an extended period.
Janet White
Oct 06, 2023
Is wharfage charged per item or shipment?
It can vary, but it's typically levied on the entire shipment.
Janet White
Oct 06, 2023
How is the free time for demurrage determined?
It's set by the shipping line or port, often based on agreements or local practices.
Sawaira Riaz
Oct 06, 2023
Can goods be denied port entry due to unpaid wharfage?
Yes, ports can hold goods until fees are paid.
Sara Rehman
Oct 06, 2023
How often are wharfage rates revised?
It depends on the port, but they can be revised based on inflation, facility upgrades, or changes in port costs.
Harlon Moss
Oct 06, 2023
How are demurrage fees calculated?
Based on daily rates, multiplied by the number of days beyond the free period.
Harlon Moss
Oct 06, 2023
Are demurrage and detention the same?
No, detention pertains to equipment like containers, while demurrage pertains to the cargo itself.
Janet White
Oct 06, 2023
Who establishes wharfage rates?
Port authorities or governing bodies typically set these rates.
Janet White
Oct 06, 2023
Can weather delays lead to demurrage?
Yes, any delay causing extended container use can trigger demurrage.
Sara Rehman
Oct 06, 2023
About Author
Written by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Sumera SaeedSumera is an experienced content writer and editor with a niche in comparative analysis. At Diffeence Wiki, she crafts clear and unbiased comparisons to guide readers in making informed decisions. With a dedication to thorough research and quality, Sumera's work stands out in the digital realm. Off the clock, she enjoys reading and exploring diverse cultures.
