Demurrage and detention fees are some of the most overlooked yet costly parts of international trade. Failing to manage them properly can result in unexpected charges, strained supply chains, and lost profits.
This guide breaks down these charges in a structured, easy-to-follow format, with FAQs and solutions.
1. What Are Demurrage and Detention?
- Demurrage: Charges applied when a container stays at the port or terminal beyond the allowed free time.
- Detention: Fees charged when the container is out of the terminal but not returned within the agreed period.
📌 Both are penalties for exceeding free time either inside or outside the terminal.
2. Why These Charges Exist
- Encourage quick container turnover
- Reduce port congestion
- Protect equipment availability
- Ensure operational efficiency for shipping lines
3. How Charges Work
| Type | Applies When… | Free Time | Example Fee |
|---|---|---|---|
| Demurrage | Container stays inside the terminal | 3–7 days | $75/day |
| Detention | Container not returned on time | 3–7 days | $100/day |
Fees vary depending on shipping lines, ports, and contract terms.
4. Common Scenarios That Trigger Charges
- Customs clearance delays
- Trucking availability issues
- Incomplete or late paperwork
- Port congestion
- Lack of visibility on free time expiration
5. Combined Demurrage and Detention (D&D)
Some carriers provide combined free time, e.g., 14 days total (7 at terminal, 7 outside). This helps optimize cargo pickup and return scheduling.
6. Who Pays These Fees?
7. How to Avoid Demurrage and Detention
- Plan port activities in advance
- Prepare documentation before arrival
- Schedule pickup and return promptly
- Track free time closely using digital tools
- Negotiate extended free time with carriers
- Hire customs brokers or freight forwarders
8. Industry Trends and Compliance
- US and EU regulators have started cracking down on unfair D&D billing practices.
- The Ocean Shipping Reform Act (OSRA 2022) now enforces transparency and dispute resolution standards.
9. Key Differences: Demurrage vs. Detention
| Feature | Demurrage | Detention |
|---|---|---|
| Applies where | Inside port/terminal | Outside terminal |
| Free time use | For cargo clearance/storage | For using container inland |
| Charged by | Terminal or shipping line | Shipping line |
10.Final Thoughts
Demurrage and detention charges are avoidable with careful coordination, solid communication, and proactive monitoring. Importers and exporters who master these cost drivers stay competitive and profitable—even during peak logistics seasons.
Request a Quote
Need a tailored solution for your shipping from China?
Let TJ China Freight Forwarder assist you with reliable, cost-effective service.
FAQ:
Q1.How do I know when free time starts?
It usually starts at container discharge, not vessel arrival. Check your bill of lading and shipping line terms.
Q2.Are demurrage and detention fees avoidable?
Yes. With good planning, prompt customs clearance, and timely container returns, they can be reduced or avoided entirely.
Q3.Do LCL (less-than-container-load) shipments have demurrage?
Not in the same way. LCL shipments may face storage fees instead, charged by the warehouse.
Q4.Is there a grace period during holidays or weekends?
Some terminals exclude weekends and holidays from free time. Others don’t. Always confirm with your port agent.
Q5.Can I dispute a demurrage charge?
Yes, especially if delays were due to port or carrier fault. Provide documentation and escalate through your freight forwarder or local regulator.