Per Diem Charge
Definition of Per Diem Charge
A Per Diem Charge, also known as a detention fee, is a cost imposed by ocean carriers for each day beyond the allocated "free" days that a shipping container is kept away from the port or container yard.
The charge is applicable once the agreed-upon free time, typically granted for the unloading or return of equipment like containers, has expired.
Why is the Per Diem Charge necessary?
Per diem charges are necessary to encourage the proper use of shipping containers. Carriers rely on the rapid turnover of their containers to maintain operations.
When a consignee or importer holds onto a container for longer than the agreed-upon period, the carrier cannot use that container for new shipments. Therefore, per diem charges are used to discourage inefficient shipping practices.
How to avoid Per Diem Charges
Importers should take proactive measures to manage their shipments to avoid incurring per diem charges. Strategies may include offloading cargo at a warehouse rather than keeping it in the container.
While warehousing incurs its own costs, these are generally lower than per diem charges, and it allows the carrier to retrieve the container on time.
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