Demurrage vs. Wharfage: What's the Difference?
Demurrage is a fee for extended use of shipping containers beyond an agreed period. Wharfage is a fee for goods passing through a port.
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.
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.
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.
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.
Extended storage of shipping containers or cargo
Movement of goods through a port or wharf
Exceeding the allotted time for container use
Standard fee for goods passing through ports
Compensate for storage space and potential delays
Fund port operations, maintenance, and services
Reactionary based on non-adherence to timelines
Applies to almost all goods passing through ports
Impact On Shipping Cost
Can significantly increase costs if not managed correctly
Predictable, but can vary based on the port or specific goods
Demurrage and Wharfage Definitions
A charge for holding shipping containers beyond the free time.
The company had to pay a high demurrage due to delays in unloading.
Charges for handling cargo at a wharf.
The wharfage at this port is higher due to its modern facilities.
A compensation for detention in transportation.
The shipper paid demurrage for the extra days the cargo stayed at the terminal.
A fee for goods passing through a port.
The exporter included wharfage fees in the shipping costs.
A penalty for the late return of rented equipment.
The train company imposed a demurrage on the late return of railway cars.
Fees associated with loading or unloading cargo at a port.
To reduce costs, the company found a port with lower wharfage rates.
A fee for prolonged storage of goods at a port.
Due to customs delays, they incurred significant demurrage.
A levy for the use of a wharf's facilities.
Wharfage ensures the maintenance of port infrastructure.
A fine for slow freight movement or unloading.
The demurrage charges increased as the goods remained unclaimed.
A tariff on cargo at docks or piers.
The imported goods had an additional wharfage cost.
Detention of a ship, freight car, or other cargo conveyance during loading or unloading beyond the scheduled time of departure.
The use of wharves or a wharf.
Compensation paid for such detention.
The charges for this usage.
(shipping) the detention of a ship or other freight vehicle, during delayed loading or unloading
A group of wharves.
Compensation paid for such detention
A dock, quay, or pier.
A charge made for exchanging currency for bullion
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.
A fee charged for using a wharf.
A charge required as compensation for the delay of a ship or freight car or other cargo beyond its scheduled time of departure
The fee or duty paid for the privilege of using a wharf for loading or unloading goods; pierage, collectively; quayage.
Detention of a ship or freight car or other cargo beyond its scheduled time of departure
A wharf or wharfs, collectively; wharfing.
A fee charged for the use of a wharf
A platform built out from the shore into the water and supported by piles; provides access to ships and boats
Is demurrage a global practice?
Yes, ports worldwide charge demurrage for extended use of containers or holding cargo.
Are wharfage fees standard for all goods at a port?
Yes, almost all goods passing through ports incur wharfage fees.
Can demurrage fees be avoided?
Yes, by promptly unloading and returning containers within the allotted time.
Can wharfage rates differ between ports?
Yes, rates can vary based on the port's facilities, location, and services.
What does wharfage primarily fund?
It funds port operations, maintenance, and associated services.
How can shippers reduce demurrage costs?
By efficiently planning unloading, managing paperwork, and timely container returns.
Is wharfage applicable to passenger ships?
Wharfage primarily pertains to goods, but ports might have separate fees for passenger vessels.
What triggers a demurrage fee?
Exceeding the free time allotted for using a shipping container or holding cargo.
Do all ports charge wharfage?
While most do, rates and practices might differ.
Are demurrage fees negotiable?
Typically, they're fixed but can vary based on volume or long-term relationships.
Who typically pays the wharfage fees?
Either the shipper, receiver, or sometimes the shipping line, based on agreements.
Can demurrage fees exceed the value of the cargo?
Theoretically, yes, if the cargo remains unclaimed for an extended period.
Is wharfage charged per item or shipment?
It can vary, but it's typically levied on the entire shipment.
How is the free time for demurrage determined?
It's set by the shipping line or port, often based on agreements or local practices.
Can goods be denied port entry due to unpaid wharfage?
Yes, ports can hold goods until fees are paid.
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.
How are demurrage fees calculated?
Based on daily rates, multiplied by the number of days beyond the free period.
Are demurrage and detention the same?
No, detention pertains to equipment like containers, while demurrage pertains to the cargo itself.
Who establishes wharfage rates?
Port authorities or governing bodies typically set these rates.
Can weather delays lead to demurrage?
Yes, any delay causing extended container use can trigger demurrage.
Written bySawaira Riaz
Sawaira 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 bySumera Saeed
Sumera 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.