Container Per Diem
When a container is loaned for shipping or storage, the container leasing companies often grant a specific number of days of free use. Within this period, users can operate the container without incurring extra fees. However, past this time, a “detention” is levied. The method of charging this per day (per diem) is called Container Per Diem.
The primary purpose of Container Per Diem is to incentivize the timely return of loan containers. Ocean carriers want to get their containers back quickly to keep them in circulation and prevent congestion, as they cannot loan them to other customers if users retain containers for a long time. Container Per Diem is implemented to discourage customers from keeping them for too long.
Per diem charges are negotiated and specified in the contract. While the rates vary across shipping lines, they are also affected by the state of the industry.
During the Covid-19 pandemic, there was an upward trend in per diem charges due to the logistics challenges caused by the worldwide lockdown. In 2023, the charges dropped by 14 percent compared to 2020.
To avoid adding pressure to the operational costs, shippers must be mindful of the return deadline and practice efficient planning and tracking to manage returns and avoid detention.
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