Demurrage and Detention Charges: What They Are and How to Avoid Them

Demurrage: the charge at the terminal

Demurrage is a charge assessed by the ocean carrier (not the terminal) when a full container sits at the port terminal beyond the carrier's free time. The container has arrived and is available for pickup, but the importer has not moved it out yet.

Free time for demurrage varies by carrier and port, but is typically 4 to 5 calendar days at major US ports. After free time expires, demurrage charges accrue daily at rates set by the carrier.

Typical demurrage rates at LA/Long Beach: $75 to $150 per container per day for the first few days, escalating to $200 to $450 per day after 10 days. Rates vary by carrier and have increased significantly since the post-2020 supply chain disruptions.

Demurrage ends when the full container is picked up from the terminal (gate out).

Detention: the charge for the container itself

Detention is a charge assessed by the ocean carrier when the container (the metal box) is not returned to a carrier depot within the carrier's free time after it has been gated out of the terminal.

When you pick up a full container, you take both the goods and the container. The carrier allows free time -- typically 3 to 5 days -- for you to unload the container and return it empty to a designated depot. If you exceed that free time, detention charges accrue.

Typical detention rates: $75 to $200 per container per day, with escalating tiers after 5 and 10 days. Like demurrage, rates have risen sharply since 2020.

Detention ends when the empty container is returned to the carrier's depot (empty return).

The difference: a summary

• Demurrage: full container sitting at the terminal, not yet picked up. Charged by the carrier for the terminal slot the container is occupying.
• Detention: container has been picked up, goods not yet unloaded, empty not yet returned. Charged by the carrier for the use of the container itself.
• Both start after free time expires. Both are set by the carrier, not the terminal. Both are assessed per container per day.

There is also a third charge that importers confuse with both: terminal storage (also called port storage). This is charged by the terminal operator for the physical space the container occupies. At some ports, terminal storage and demurrage run simultaneously; at others, terminal storage begins after demurrage free time expires. Always confirm which charges apply at your specific terminal.

What triggers unexpected demurrage and detention bills

• Customs holds: if CBP places a hold on your shipment for inspection or documentation issues, the container sits at the terminal while charges accrue. CBP does not extend free time because of holds.
• Missing or late documents: if your customs entry cannot be filed because the commercial invoice, packing list, or bill of lading is missing, the container stays at the terminal.
• Chassis shortages: at congested ports like LA/LB, chassis (the trailer frames used to move containers by truck) can be in short supply. If your drayage company cannot find a chassis during free time, you pay demurrage regardless.
• Customs broker delays: if you wait until vessel arrival to engage a broker or transmit documents, the entry cannot be pre-filed. Any processing time eats into free time.
• Unloading delays at your warehouse: if you pick up the container but cannot unload it quickly (warehouse staffing, dock door availability), detention charges accumulate at your cost.

How to avoid demurrage and detention

• Pre-file your customs entry. Entries can be filed up to 5 days before vessel arrival. A pre-filed entry means customs clearance can complete before or immediately after arrival, eliminating the customs processing lag during free time.
• Have your documents ready before the vessel sails. Commercial invoice, packing list, and bill of lading should be in your broker's hands within 48 hours of the vessel departing China.
• Book drayage before the vessel arrives. Confirm a truck appointment for within the first 2 days of free time. At LA/LB, same-day gate appointments require advance booking.
• Know the free time window before the vessel arrives. Confirm with your freight forwarder: when does free time start (typically on container availability, not vessel arrival), how many days are included, and what the daily rate is after free time expires.
• Unload the container the same day it arrives at your warehouse if at all possible. The detention clock does not stop when the truck arrives at your dock.

Disputing demurrage and detention charges

Carriers issue demurrage and detention invoices after the fact, sometimes weeks after the container was returned. The invoice will show the gate-in, gate-out, and empty-return dates and the calculated charges.

Disputes are possible but limited. Valid dispute grounds include: carrier-caused delays (vessel late arrival reducing effective free time), equipment unavailability (carrier did not have chassis or empty return slots available), and system errors in date recording.

Demurrage and detention that resulted from customs holds, chassis shortages not caused by the carrier, or the importer's own operational delays are typically not waived. Carriers have become less willing to grant courtesy waivers since 2020.

If you believe a charge is in error: gather documentation (port data timestamps, carrier communications, broker confirmations) and dispute in writing within 30 days of the invoice date. Most carrier tariffs include a formal dispute procedure.