Destination charges are where many PNG shipments go over budget. They're rarely on the first quote, they're often billed by several different companies, and some of them grow every day the cargo waits. Knowing what each one is and when its clock starts is the best way to control them.
This guide explains each charge, who bills it and how to avoid paying more than you should. It's part of our complete guide to shipping from Australia to PNG.
Key points
- Destination charges are billed by the shipping line's agent, the terminal, your broker and your transport company.
- Storage is charged by the terminal; demurrage is charged by the line for its container inside the terminal; detention is charged by the line for its container outside.
- Free time varies by shipping line and container type, and daily rates usually rise the longer cargo waits.
- Under CIF and CFR terms, the PNG buyer usually pays destination charges, even though the seller paid the freight.
- Vehicles left at a Customs wharf for more than 30 days are forfeited to the State.
What destination charges are
Destination charges are everything payable in PNG to get your cargo from the ship to your door, apart from duty and taxes. They're billed by several parties, which is why they can be confusing:
| Charge | Usually billed by | What it's for |
|---|---|---|
| Terminal handling charge | Shipping line's agent or terminal | Moving the container from the ship to the yard and onto a truck |
| Delivery order fee | Shipping line's agent | Issuing the document that releases the cargo |
| Documentation fee | Shipping line's agent | Processing the bill of lading and arrival documents |
| Storage | Terminal | Cargo or containers left in the yard beyond free time |
| Demurrage | Shipping line | The line's container staying inside the terminal beyond free time |
| Detention | Shipping line | Keeping the line's container outside the terminal beyond free time |
| Depot and unpacking fees (LCL) | Consolidator's PNG depot | Unpacking shared containers and handling your cargo |
| Customs broker fee | Broker | Preparing and lodging the import entry |
| Inspection and treatment | NAQIA or treatment provider | Biosecurity inspection, fumigation or cleaning |
| Cartage | Transport company | Delivery from the terminal or depot |
How the clocks work
Three charges depend on time, and each has its own clock:
- Storage starts once the terminal's free period after discharge ends, and stops when the cargo leaves the terminal.
- Demurrage starts when the shipping line's free time inside the terminal runs out, and stops when the container is collected.
- Detention starts when the line's free time outside the terminal runs out, and stops when the empty is returned.
Some lines combine demurrage and detention into a single free-time allowance. Either way, daily rates commonly step up the longer the container is out, so a few extra days can cost more than you'd expect. Ask for the free time in writing at booking, and ask for more if your site is remote or unpacking will take time.
Who pays
Destination charges are normally the buyer's responsibility under most Incoterms. Under CIF and CFR, the seller pays freight to the PNG port, but the buyer still pays the terminal handling and other destination charges. Only DAP and DDP put more of the destination cost on the seller, and even then storage and demurrage caused by the buyer's delays are usually recharged. Our guide to what shipping from Australia to PNG costs explains how Incoterms affect the overall budget.
How to keep destination charges down
- Send documents to your broker before the ship arrives, so clearance starts on discharge.
- Pay freight and destination charges promptly so the delivery order isn't held.
- Make sure the original bill of lading is surrendered in time, or use a telex release or sea waybill.
- Have permits in place and timber packaging compliant, to avoid inspection holds.
- Book trucks in advance and plan the unpack, so the container comes back quickly.
- Negotiate extra free time at booking if you know you'll need it.
- For full containers, compare buying a shipper-owned container, which avoids detention entirely. See FCL or LCL shipping to PNG.
Most extra charges trace back to a delay. Our guide to why cargo gets held in PNG ports covers the causes, and our guide to Motukea International Terminal explains how collection works in Port Moresby.
A warning for vehicles
30 days and it's gone
PNG Customs warns that a vehicle left at a Customs wharf for more than 30 days is forfeited to the State and can be sold or auctioned to recover duty, GST, handling and storage fees. Plan the funds and paperwork before the vehicle ships.
Checking and disputing invoices
Check every destination invoice against your quote and the free-time terms. Common errors include storage charged from the wrong date, demurrage charged for days when the cargo was held by an authority's processing, and duplicate handling charges. Raise queries quickly and in writing, with your dates and documents. Lines and terminals are far more willing to adjust charges that are queried promptly.
Frequently asked questions
Is demurrage the same as detention?
No. Demurrage is for the shipping line's container staying inside the terminal too long; detention is for keeping it outside the terminal too long, for example while unpacking.
Can I get more free time?
Often, if you ask at booking. Lines will sometimes extend free time for regular customers or for remote deliveries.
Why am I paying terminal handling in PNG when the seller paid the freight?
Under CIF and CFR terms, the seller pays the freight to the PNG port, but destination charges such as terminal handling are normally the buyer's responsibility.
Part of our complete guide
This article is one step in Shipping from Australia to PNG: The Complete Guide. Other guides in the "arrival, fees, and delivery" stage:
This guide is general information, current at the date of last review. Rates, schedules, duty rates and procedures change, so confirm the details of your shipment with a licensed freight forwarder or customs broker before you act.