Understanding Demurrage and Detention Charges

Shipping Costs

Why demurrage and detention matter

Demurrage and detention are fees charged by shipping lines when containers are not returned within the agreed free time. Think of them as late fees for holding a container longer than allowed, either at the port or at your facility.

Demurrage

Demurrage applies when a container stays too long at the port or terminal.

  • This usually happens if cargo is not cleared by customs or collected on time.
  • Fees begin once the free time (as agreed in the shipping contract) has expired.
  • Charges compensate the shipping line for space and opportunity cost of keeping the container idle.

Example: If your container is sitting at the port waiting for clearance beyond the free period, demurrage is charged daily until it is collected.

Detention

Detention applies when the container has already left the port but is not returned to the shipping line within the agreed timeframe.

  • This often happens when a consignee keeps the container at their warehouse for too long.
  • Causes can include warehouse backlogs, transport delays, or extended use as temporary storage.
  • Fees cover the shipping line’s loss of use of their equipment.

Example: If you keep an empty container at your warehouse beyond the allowed free days before returning it, detention fees will apply.

Why It Matters

Demurrage and detention fees may look small at first but can escalate quickly. For example:

  • A 20 ft container charged at $60/day for the first 10 days, and $1,200/day after that, could total $18,000 in just a few weeks.
  • Multiply that across several containers, and the costs can significantly impact profitability.

External factors such as blank sailings, container shortages, customs delays, or geopolitical issues can make these fees harder to manage.

Our Advice

  • We advise on customs clearance procedures in advance.
  • We coordinate timely delivery and return of containers.
  • We provide updates on risks and disruptions that could cause delays.

By planning ahead and working closely with us, you can keep your logistics costs under control and avoid expensive surprises.