Demurrage and detention: the charges nobody budgets for
Demurrage is the container sitting in the port; detention is you holding it outside. How free time works and how to avoid both.
The short answer
Demurrage is charged when a container sits inside the terminal beyond its free time. Detention is charged when you have taken the container out of the terminal and not returned it in time. Both escalate daily on a rising scale, both are charged per container, and both are almost entirely avoidable with paperwork submitted before the vessel arrives.
The difference in one line
Demurrage is inside the gate; detention is outside it. If your container is still in the terminal and the clock has run out, that is demurrage. If you have collected it, unpacked it at your warehouse, and not returned the empty in time, that is detention.
Some carriers bill them as a combined 'merged demurrage and detention' figure, which obscures which side of the gate the delay happened on. Ask for them separated — the fix for each is different.
How free time works
Every booking includes a period of free time, commonly three to seven days at destination, though it varies by carrier, lane and contract. Free time normally starts when the container is discharged from the vessel, not when you are told it has arrived, and that gap alone consumes a day or two for many importers.
The rates escalate deliberately. A typical structure charges a modest daily rate for the first tier, roughly double for the next, and considerably more thereafter, per container per day. A handful of containers held for a week past free time becomes a five-figure invoice quickly.
Why the clock usually runs out
In our experience the causes are boringly consistent and almost all preventable.
- Customs entry not pre-filed, so clearance only begins after arrival instead of before it.
- Original bills of lading still in the post, because the goods travelled faster than the paperwork.
- Unpaid freight or duty holding the release, sometimes for a sum far smaller than the resulting demurrage.
- No haulier booked, in a market where two or three days' notice is often the minimum.
- Port congestion or an inspection hold — the one cause genuinely outside your control, and the reason to keep buffer rather than plan to the last free day.
How to avoid it
The single highest-value habit is pre-clearance: file the customs entry before the vessel arrives, so the container is releasable the moment it is discharged. This alone eliminates most demurrage exposure.
Second, use a telex release or an electronic bill of lading rather than couriering originals. Third, book collection against the estimated arrival rather than waiting for the arrival notice. Fourth, if you consistently need longer, negotiate extended free time into your rate — carriers will often trade a few extra days against volume, and it costs far less than paying the charge.
If you are already accruing
Move immediately: the escalating tiers mean a day of delay now costs more than a day of delay did last week. Get the release blocker identified and cleared, and book the haulier before the paperwork is finished rather than after.
Charges arising from terminal congestion or a customs inspection are sometimes waivable, but only if you ask promptly and with evidence. Carriers rarely volunteer a waiver, and the request is much weaker a month later.
Last reviewed by Priya Raman, Head of Ocean Freight at First Base Freight.
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