Demurrage and Detention Explained: 6 Ways to Avoid Fees
Demurrage and detention are separate charges for holding a container too long. Learn the difference, free time and how to avoid them.
Demurrage and detention are two separate charges for holding a container too long. Demurrage applies when a full container stays inside the port or terminal beyond free time. Detention applies when the container stays outside the terminal beyond free time. Shipping lines and terminals normally charge both by the day.
This guide explains demurrage and detention in plain terms. It covers the difference, how free time works, common causes and ways to avoid them. It is written for exporters, importers and customs agents. Amounts are set by each line and terminal, so no figures are given here.
Demurrage and detention: what is the difference?
The main difference is where the container stands. Demurrage relates to time inside the terminal. Detention relates to time outside it.
| Factor | Demurrage | Detention |
|---|---|---|
| Container location | Inside the terminal | Outside the terminal |
| Starts on import | Discharge from vessel | Full container leaves the port |
| Ends | Container leaves the port | Empty container is returned |
| Common cause | Late customs clearance | Late unloading or return |
The exact method varies by line and terminal tariff. Wording also differs. Some lines use the term per diem for the daily equipment charge. Read each line's own definition before you book.
How free time works
Free time is the number of days a line allows without charge. It differs between ports and lines. When it ends, each extra day is billed.
- Some tariffs count calendar days and some count working days. Holidays can matter.
- Rates after free time are often tiered and rise as days pass.
- Some lines give demurrage and detention free time separately and some combine it.
- Extra days can sometimes be bought or negotiated.
Before you sign a transport contract, write down the free days, the counting method and the rate after free time, and get them confirmed.
A simple example of how charges build up
The numbers below are illustrative only. They are not real tariffs.
Suppose a line gives five days of demurrage free time. A full container is discharged on day one and leaves the port on day eight, so three days are billed. Now suppose detention free time is four days. The consignee unloads the box and returns the empty on day seven after pickup, so three more days are billed. If the tariff is tiered, each extra day may cost more than the one before.
The lesson is simple. A few days lost at the port and a few more at the warehouse create two separate bills. Planning both stages together keeps the total lower.
Why demurrage and detention happen
Most charges come from predictable delays.
- Documents are incomplete, or the original bill of lading arrives late.
- Customs clearance starts late, or the cargo is held for inspection.
- Freight or port charges at destination remain unpaid.
- The consignee's warehouse is not ready, or inland transport is late.
- The empty return depot is closed or has no slot.
- Port congestion or weather disrupts the plan.
Transport documents play a large part. Read about release methods in our guide to the bill of lading.
Demurrage and detention on exports
These charges are not only an import issue. On exports, a container may enter the port early and spend extra time before loading. Detention on an empty container may also start when you collect it, before you pack it. Ask the line about origin terminal rules and the container receiving window.
In LCL, CFS warehouse charges also apply. Once free time there ends, storage is usually billed daily. See FCL vs LCL shipping for how LCL differs from a full container.
Notes for Iranian ports
Most containerised cargo in Iran passes through Shahid Rajaee port near Bandar Abbas, and Chabahar on the Gulf of Oman has a container terminal. Free days and tariffs are set by the shipping line and terminal operator, and they change. Ask the line for its local charges before booking.
Cargo waiting in port may also fall under port warehouse and customs storage rules, which differ from a line's demurrage. Complete documents and inspection timing affect how long a container stays. Get current details from your customs broker and customs. For port choice, see our article on container shipping from Iran.
Six ways to avoid demurrage and detention
- Confirm free days and post-free-time rates in writing before booking.
- Complete documents before the vessel arrives, and plan for the original bill or a telex release.
- Arrange the customs broker and inland truck in advance.
- Keep the destination warehouse ready for unloading.
- Return the empty container quickly to the agreed depot.
- If free days are not enough, ask for extra days before booking.
What to ask before you book
Put these questions to your forwarder or the line.
- How many free days apply at the origin and at the destination?
- Are days counted as calendar days or working days?
- Is free time combined or separate for demurrage and detention?
- What is the rate after free time, and does it rise in steps?
- Where must the empty container be returned, and when does that depot open?
- Can extra free days be added, and at what cost?
- Who pays port charges under our delivery term?
Keep the answers in your booking confirmation. A written reply settles most disputes later.
Royan Logistic is a Tehran-based international freight and logistics company that follows sea freight together with customs coordination. See our sea freight and customs coordination pages. The delivery term in your sales contract also decides who pays port costs; the International Chamber of Commerce publishes those rules. Rules and tariffs change, so confirm current conditions with customs and the shipping line.
Frequently asked questions
Who pays demurrage and detention?
Usually the line's customer pays, meaning the party that booked the shipment or the consignee. The transport contract and delivery term decide which side carries the cost.
Can free time be extended?
Sometimes. Some lines sell extra days or agree them at booking. Arrange this before the shipment starts, not after charges begin.
Is demurrage the same as storage?
No. Demurrage is a line or terminal charge for holding a container. Port or customs storage follows separate rules, which you should check with your broker.
When does detention start?
On imports it usually starts when the full container leaves the port and ends when the empty is returned. The exact definition is in the line's tariff.
Plan container time before it costs you
Send us your route, container type and clearance plan, and we will review the timeline with you. Fill in the quote form to start.
Updated: