Demurrage is a charge for leaving a container at the port or terminal for longer than its free time allows. Detention is a charge for keeping the container, after you have taken it out of the terminal, for longer than its free time before you return it empty. The carrier’s aim is the same in both cases: to keep containers moving. What differs is where the container is and what is holding it up.
First-time importers often meet these charges as a surprise invoice. Both can be avoided with planning, and this guide explains the meaning of each, how they differ, what usually causes them and what to do before and after the invoice arrives.
What is demurrage?
Every container comes with a free time allowance at the destination port. Free time is a grace period, which one shipping glossary describes as usually two to seven days, to unload and collect the container without extra fees. Once it ends, charges build up per day (or per hour). That is demurrage. Source: Clarksons shipping glossary, “What is demurrage”.
The most common reasons a container overstays are a customs hold, missing or mismatched documents, or a truck and warehouse that are not ready when the cargo clears.
What is detention?
Once you collect the container, a second free time allowance applies to how long you may keep it before returning it empty to the carrier. If it comes back late, detention accrues daily. This usually has nothing to do with the port or customs. It happens when the container waits for a free unloading slot, a busy warehouse or a delayed return trip.
Demurrage vs detention
| Demurrage | Detention | |
|---|---|---|
| Where is the container? | Inside the port or terminal | Outside the terminal, with you |
| What starts the charge? | Free time ends before you collect it | Free time ends before you return it empty |
| Typical cause | Customs hold, missing documents, no trucking arranged | Slow unloading, no warehouse space, delayed return |
| What fixes it? | Clean paperwork and quick clearance | Unloading plan and return booking |
How are the charges calculated?
The free time and the daily rate come from the carrier’s or terminal’s own tariff, and the rate often rises the longer a container stays. Always ask for the free time at both the origin and the destination before you book.
Here is how the arithmetic works, with made-up numbers for illustration only. If free time is 5 days, the container is collected on day 9 and the rate is USD 100 a day, there are 4 chargeable days and the demurrage is USD 400 per container. Real tariffs differ, so use your carrier’s figures.
Who pays demurrage and detention?
Usually the party responsible for the cargo, typically the importer or exporter. The contract says who pays, and it can place the cost elsewhere: a freight forwarder may be liable, for example, if its own error such as wrong customs paperwork caused the delay. Check the contract terms before an invoice arrives, not after.
Demurrage in chartered shipping
The word is also used outside container shipping. Where a vessel is chartered, cargo owners who go over the loading or discharge time agreed in the charter contract pay the shipowner demurrage. If you ship in containers, your charges follow the carrier’s or terminal’s tariff instead.
Common causes
- A customs hold or inspection. See why customs clearance gets delayed.
- Documents that do not match, such as a different quantity or description on the invoice and packing list. See the commercial invoice and packing list guide.
- Missing licences, permits or certificates that customs needs before it releases the cargo.
- A customs broker or trucker who was not briefed until the ship had already arrived.
- A warehouse with no space or staff to unload on the day the container is collected.
- Port congestion or a shipment that arrives earlier or later than planned.
How to avoid demurrage
- Get documents right before the ship arrives: commercial invoice, packing list, certificate of origin, bill of lading and any permits.
- Brief your customs broker early and agree who files what and by when.
- Track the vessel and book trucking for the expected clearance date, not after it.
- Use the bill of lading correctly: if the original is needed to release cargo, plan for the courier time. See the bill of lading guide.
- Know your free time and count it from the date the carrier states, not from the day you notice.
How to avoid detention
- Confirm the warehouse has space and staff on the day you collect the container.
- Collect only when you can unload straight away.
- Book the empty return as soon as you know the unloading date.
- Ask your forwarder what free time applies at the destination before you book, and compare it between carriers.
If you receive an invoice
- Check the container number, dates and daily rate against the carrier’s tariff and your free time.
- Find out which delay caused it, and keep proof (clearance dates, emails, port notices).
- Ask the carrier for mitigation or a waiver in writing, and do it quickly.
- Keep these charges in your landed cost estimate. See the import landed cost guide.
What the rules say for US ocean shipping
In the United States, the Federal Maritime Commission (FMC) has a billing rule for these charges. It requires ocean carriers and marine terminal operators to issue a demurrage or detention invoice within 30 calendar days of when the charges were last incurred. The invoice must include certain required information. If it misses the deadline or the required content, the billed party has no obligation to pay that charge. Billed parties also get at least 30 calendar days to ask for mitigation, a refund or a waiver. Source: FMC, Final Rule on Detention and Demurrage Billing Practices.
A court later set aside one section of the rule, the one limiting who can be invoiced. The rest remains in effect, according to the FMC’s notice on the court decision. This is a US rule, so check what applies in your own destination.
Related guides
To plan the whole shipment, read FCL vs LCL shipping, ocean freight transit times and how long an import from China or Pakistan takes.
