Understanding Demurrage and Detention
Two of the most frustrating costs in ocean shipping are demurrage and detention fees. These charges can turn a profitable shipment into a loss if you're not careful.
What's the Difference?
Demurrage
Charged when a container stays at the port/terminal beyond the free time period. The port or terminal operator charges this fee.
- Applies when container is still at port
- Clock starts when container is discharged from vessel
- Free time is typically 3-7 days depending on the port
Detention
Charged when you keep the carrier's container beyond the free time after leaving the port. The shipping line charges this fee.
- Applies after container leaves the port
- Clock continues until empty container is returned
- Free time usually 4-7 days for unloading and return
How Fees Escalate
Both demurrage and detention typically increase over time:
- Days 1-5 over free time: $75-150/day per container
- Days 6-10: $150-250/day
- Days 11+: $250-400/day or more
A single 40-foot container held for two weeks past free time can easily incur $2,000-4,000 in combined charges.
Common Causes of Delays
- Customs holds: Documentation issues or inspections
- Warehouse capacity: No space to receive the container
- Truck availability: Driver or chassis shortages
- Unloading delays: Staff or equipment unavailable
- Documentation errors: Bills of lading, delivery orders
Strategies to Minimize Charges
Pre-Arrival Preparation
- Complete customs clearance before vessel arrives
- Arrange trucking and chassis well in advance
- Confirm warehouse receiving schedule
- Have all documentation ready and verified
Operational Efficiency
- Unload containers immediately upon delivery
- Return empty containers same-day if possible
- Use drop-and-hook arrangements when available
- Consider street turns to reduce empty returns
Negotiate Better Terms
- Request extended free time in your contract
- Ask about free time pools across multiple containers
- Negotiate caps on maximum charges
- Build relationships with carriers for flexibility
Disputing Unfair Charges
You may have grounds to dispute charges when:
- Delays were caused by the carrier or port
- Documentation was not available from the carrier
- Equipment issues prevented pickup or return
- Acts of God or force majeure events occurred
Keep detailed records of all pickup attempts, communications, and delays not within your control.
Key Takeaways
Demurrage and detention are often avoidable with proper planning. Treat your free time as a critical deadline and build buffer into your logistics schedule.
