What term refers to charges assessed when rail freight and ships are retained beyond the specified loading or unloading time?

• A. Detention
• B. Demurrage
• C. Distribution
• D. Demand planning

Answer: (B)

Demurrage is the charge assessed when a carrier’s equipment or vessel is kept beyond the allotted free time for loading or unloading. This penalty covers both rail cars and ships when they remain in the yard or port past the agreed period, tying up the asset that the carrier needs for other shipments. The idea behind demurrage is to compensate the carrier for the time the asset is unavailable for redeployment. Free time exists to encourage prompt handling, and daily demurrage accrues if the loading or unloading extends beyond that window. Detention, by contrast, refers to charges for holding the equipment after it has been released to the shipper or consignee and is no longer in the carrier’s yard, so it’s the time the equipment sits in the shipper’s possession beyond the allowed period. In this scenario, the focus is on the delay beyond the loading/unloading window, which is demurrage.