Demurrage vs Detention: Differences, Free Time and How to Avoid Them

Demurrage and detention are the container charges importers and exporters run into most often, and they can reach surprisingly high amounts. Both essentially mean "you kept the container too long", but they arise in different places and for different reasons. This guide explains the difference between demurrage and detention, how free time works, how the charges are calculated and, above all, how to avoid them.

What are demurrage and detention?

Most containers belong to shipping lines, and lines want their equipment back in circulation quickly. So whoever keeps a container beyond an agreed period is charged for it.

Demurrage: charged by the line when a full container stays in the terminal (port) after free time has expired. On imports it arises when the container is not picked up after discharge; on exports when a container is delivered to the terminal early and waits to be loaded.
Detention: charged by the line when the container is outside the terminal, in the customer's hands, beyond free time. On imports it covers the period from pick-up of the full container until it is returned empty; on exports, from pick-up of the empty until the full container is delivered back to the terminal.

In short: demurrage runs inside the terminal, detention runs outside it.

In practice, some markets use "demurrage" loosely for both charges, including Turkey, where "demuraj" is often a catch-all. Ask your line or forwarder exactly what a quoted or invoiced item covers.

Don't confuse it with storage

Demurrage and detention are what the line charges for its equipment. Storage is what the terminal operator charges for the space the container occupies in its yard. Demurrage and storage can both run on the same day, because one is paid to the container owner and the other to the terminal operator. Keep them separate in your cost planning.

How free time works

Free time is the number of days the line allows before charging demurrage or detention. Points to watch:

It varies by line, port, equipment type and agreement. Standard free time is in the carrier's tariff, and longer periods can often be negotiated for regular shipments.
It may be separate or combined. Some lines give separate free time for demurrage and detention; others give one combined period ("D&D").
The start point matters. On imports, demurrage free time usually starts at discharge (or vessel arrival), while detention starts when the container leaves the terminal. The exact rule is in the carrier's terms.
Calendar days may count. Many tariffs count weekends and public holidays, so factor this in for arrivals just before a holiday.
Special equipment often gets less. Reefers, open tops and flat racks usually have shorter free time and higher daily rates.

If you are using special equipment, ask about its free time separately at booking.

How are demurrage and detention calculated?

The logic is simple: days beyond free time × the daily rate for that day. The daily rate is often tiered, rising the longer the delay lasts.

An example of the logic (figures for illustration only):

Suppose the container has 7 days of free time.
It is picked up on day 15, so 8 chargeable days accrue.
If the tariff has one daily rate for the first tier (say days 8 to 14) and a higher rate for the next tier, each day is multiplied by its tier's rate and the results are added up.

Real daily rates vary by line, port, container type and period, so get the current figures from the carrier's tariff or your forwarder. Charges are usually per container and often in foreign currency, so with multi-container shipments the total grows quickly.

To forecast costs, ask the line for its demurrage and detention tariff for the relevant port and equipment at booking. Estimate how many days you need, based on the likely customs timeline, distance to the delivery point and your unloading capacity; this also strengthens your hand when negotiating extra free time.

Why do demurrage and detention occur?

The most common causes are:

Missing or late customs documents (invoice, certificate of origin, conformity documents and so on)
Waiting for a customs inspection or additional checks
No delivery order because freight or local charges are unpaid
The original bill of lading reaching the consignee late
No space or unloading capacity at the consignee's warehouse
Empty containers returned late or to the wrong depot
On exports, collecting the empty container before the cargo is ready
Reduced customs, terminal and warehouse hours over public holidays
A vessel arriving earlier than planned, so free time starts sooner than expected

How to avoid demurrage and detention

Before shipment

Negotiate free time up front. If you expect a long customs process or a distant delivery point, ask for extra free time at booking; it is much harder to get afterwards.
Prepare documents early. Complete customs paperwork before the vessel arrives and discuss pre-arrival options with your customs broker.
Plan payment and the B/L. If an original B/L is required, courier it in good time; where suitable, consider a telex release or seaway bill.

On arrival

Follow the arrival notice. Track changes to the vessel's estimated arrival.
Arrange pick-up and unloading in advance. Book the truck and the unloading team ahead, and align your inland transport plan with the customs process.
Return the empty to the right depot. Check the depot the line nominates and its opening hours, and keep the interchange receipt (EIR).

On exports

Collect the empty container only when the cargo is ready.
Avoid delivering the container to the terminal long before the vessel cut-off; ask about the terminal's early acceptance rules.

What to check when the invoice arrives

Before paying a demurrage or detention invoice, check:

Do the free time start date and number of days match your agreement?
Do the gate-out and empty return dates match your documents (EIR, return receipt)?
Are the daily rates in line with the carrier's tariff for that period?
Was part of the delay caused by the carrier or terminal, such as a terminal closure or an empty depot refusing returns?

If something does not add up, dispute it promptly and in writing, with supporting documents.

Frequently asked questions

Can demurrage and detention run at the same time?

For the same container on the same day, usually only one applies: demurrage if it is in the terminal, detention if it is outside. Lines that use combined free time (D&D) track a single total period instead.

Who pays demurrage caused by a customs delay?

Usually the party responsible for destination costs under the sales contract and the Incoterms rule, which in most cases is the buyer. The cause of the delay and the contract terms can change this.

Can free time be extended?

Yes, most lines will grant extra days through negotiation. The safest approach is to request it at booking and get written confirmation.

At Medius we plan free time around your needs before shipment and coordinate customs and pick-up on arrival to keep waiting charges down. See our sea freight page or fill in our quote form.