Difference between ground rent and demurrage and detention
This is a question from Siddhartha
What is ground rent , is it different from demurrage and detention ?
and who will collect ground rent ?
Siddhartha, in very simple terms, ground rent indicates Storage and it is different from demurrage and detention..
Storage could occur under below conditions :
- On import full container(s) at the port or inland terminal while it is under the custody of the shipping line before the container is released to the importer..
- On import full container(s) at a customs bonded warehouse where the importer or customs have requested it to be moved for the purpose of inspection etc..
- On empty containers at an empty depot where the shipping line is storing it for the purpose of utilisation for exports, but due to overstock, or lack of space on board the ship or lack of exports they are forced to keep the boxes under storage..
- On export full containers at the port or inland terminal while it is under the custody of the shipping line before the container is shipped on board.. This could generally happen if the exporter has already moved the container into the port, but has some documentary or other issues to sort out before it is shipped.. By contrast very less containers go into storage over exports as compared to imports..
- On transhipment containers (full or empty) at the port while it is under the custody of the shipping line awaiting a connecting vessel..
- On containers that are detained by Govt. authorities like Customs, Health, Police etc..
Storage is charged and collected by the entity that is storing the container in their facility for the shipping line or the exporter or importer..
Demurrage and detention is charged by the shipping line in accordance with the number of free days offered and as per the tariff set by the shipping line..
Storage is charged by the port, inland terminal or shipping line in accordance with the number of free days offered and as per the tariff set by them..
To summarise :
- Storage – amount charged by the entity storing the container (full or empty) till it moves out of the facility
- Demurrage – amount charged by the shipping line from the time of expiry of free days till it is moved out of port or terminal for unpacking
- Detention – amount charged by the shipping line from the time the full container is picked up till it is returned empty to the depot nominated by the shipping line
- Once returned, till it is reused, the empty container can incur storage at the depot
So its more or less like a circle of life.. 🙂
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