In Shipping, What is Demurrage and Detention?

If you import or export goods, you’ve probably heard the terms demurrage and detention, usually when an unexpected invoice shows up. In simple terms, these are fees charged when containers are not moved or returned within the agreed free time. Understanding them is essential for controlling logistics costs and avoiding disputes with shipping lines or terminals. Let’s break it down clearly and practically.

Understanding Demurrage and Detention in Simple Terms

What Is Demurrage?

Demurrage is a fee charged when a container stays too long at the port or terminal after it has been unloaded from the vessel. In practice, carriers give you a limited number of “free days” to pick up the container. If you exceed that period, you start paying daily charges.

Example:
Your container arrives on Monday, and you have 5 free days. If you collect it on the 7th day, you’ll likely pay 2 days of demurrage.

Think of it like parking in a paid lot. If you don’t move your car in time, you pay extra.

What Is Detention?

Detention applies after the container leaves the terminal. It’s charged when you keep the carrier’s container outside the port longer than the agreed free time before returning it empty.

Example:
You pick up the container on time but take too long to unload it at your warehouse. If you return the empty container late, detention fees apply.

A common mistake is assuming these charges are the same. They’re related but they apply at different stages of the container’s journey.

Key Differences at a Glance

• Demurrage: Container inside the port/terminal too long.
• Detention: Container outside the port too long before return.
• Both depend on agreed “free time” in your contract.

Although often grouped under shipping container fees (variation 1), they are calculated separately and can accumulate quickly.

Why Demurrage and Detention Matter for Your Business

These charges can significantly impact your landed cost. In busy ports, daily rates can increase progressively: the longer the delay, the higher the cost per day.

Real-Life Situations That Trigger Charges

• Customs clearance delays
• Missing documentation
• Port congestion
• Trucking shortages
• Warehouse scheduling issues

In my experience, customs documentation errors are one of the most common causes. Even a minor discrepancy can hold a container for days.

How to Avoid Unnecessary Charges

Here are practical, actionable tips:

1. Negotiate free time upfront
   Always clarify free days in your contract of carriage. Don’t assume standard terms.
2. Pre-clear customs when possible
   Work with a reliable broker and submit documents early.
3. Coordinate trucking in advance
   Book transport before the vessel arrives.
4. Track container milestones
   Use logistics management tools or your freight forwarder’s tracking system to monitor ETA and deadlines.
5. Align warehouse availability
   Make sure your receiving team is ready before pickup.

In practice, companies that treat container tracking as a daily operational task, not a last-minute reaction, rarely face serious port storage charges (variation 2).

Understanding demurrage and detention is not just about definitions—it’s about protecting your margins. With proper planning, documentation control, and coordination, these fees can be minimized or completely avoided.

FAQs About Demurrage and Detention

1. Can demurrage and detention be charged at the same time?

Yes. If a container sits too long at the terminal (demurrage) and is also returned late after pickup (detention), you may be charged for both. They apply to different phases of the container cycle.

2. Who is responsible for paying these charges?

Typically, the importer or exporter is responsible, depending on the Incoterms agreed in the sales contract. Always verify responsibilities in your shipping agreement to avoid disputes.