Demurrage and detention: how importers lose money on free time

Demurrage and detention are the most predictable avoidable cost in container importing, and importers pay them anyway — usually for the same handful of reasons, most of which come down to finding out about something too late.

This is where the money goes and what actually stops it.

The two charges, and the line between them #

The terminal gate divides them:

• Demurrage — the container is still inside the port terminal, past its free time. You are paying for yard space.
• Detention — the container has left the terminal and is with you. You are paying for the line’s equipment.

One shipment routinely incurs both: demurrage while customs clearance runs, then detention while the box waits to be stripped at your warehouse.

Free time is the allowance before each starts. It is contractual, not a port rule — two importers collecting off the same vessel can be on different clocks.

Why it escalates #

Tariffs rise in bands. A representative European schedule:

Two things make this bite harder than expected. The rate escalates, so a week’s delay costs far more than twice a three-day delay. And it is per container — a twenty-container consignment multiplies every number in that table by twenty.

For reefers, both the free time and the rate are worse: often 2–4 days instead of 5–7, at a higher daily charge.

Where the days actually go #

The clock starts at discharge, not arrival notice. This is the most common misunderstanding. A vessel that berths two days early gives you two fewer days, and nobody sends a correction.

Weekends count. Free time is normally calendar days unless the contract says working days. A reefer discharged at Rotterdam the Thursday before Easter can burn a whole three-day allowance before anyone is back at a desk.

Clearance is slower than the allowance. If your free time is three days and your customs process reliably takes four, you are not at risk of demurrage — you are budgeting for it, whether or not you have noticed.

The original B/L is in a courier bag. Documents travel separately and sometimes lose the race.

Nobody was told. The arrival notice went to a notify party who left the company.

The empty went back late. Detention runs to the depot return, not to the strip. Nobody owns this step, so it slips.

What actually works #

Watch discharge, not the ETA #

Everything else follows from this. If you know discharge happened the moment it happened, you have your full free time to work with instead of discovering it retrospectively. If you learn it from an invoice, you have already lost.

This is what tracking is for. Not the map — the discharge event.

Know your real numbers #

Three facts, per lane, before the vessel arrives: how many free days, whether demurrage and detention are separate or combined, and calendar or working days. Most importers can’t state these from memory for their main lane, and all three are in the contract.

A combined allowance is the one that catches people: seven combined days sounds generous until clearance eats five of them and you are on detention from the moment the box leaves the gate.

Delete the document race #

Ask for the invoice and packing list on the day of loading — the exporter has them then. Use telex release wherever the relationship allows; it removes original-B/L demurrage as a category.

Plan the strip and the empty return #

Detention ends when the empty is returned. Book the depot slot when you book the haulier, not after.

Negotiate free time, not just rate #

Free time is one of the more winnable negotiations with a line, and often worth more than a small rate reduction. A line prices your free time on how promptly you return equipment — a good record is leverage.

That is not a courtesy, it is the economics: reefer equipment is scarce and expensive, and short free time is how a line forces it to turn. Why there is never a reefer when you need one explains where the scarcity comes from, and why prompt empty returns are the cheapest lever you have on your own future costs.

Doing the arithmetic honestly #

Before optimising, work out what it is costing you: days past free time × rate × containers, over a year. Most importers who do this for the first time find one of two things — either the number is small and it isn’t worth process change, or it is one of their larger controllable costs and has never appeared on anyone’s report because it arrives as scattered invoices.

Either answer is useful. Not knowing is the only bad option.

FAQ #

Can one shipment be charged both demurrage and detention? #

Yes, and on a slow clearance it usually is. The two charges cover opposite sides of the terminal gate, so a box that sits in the yard and is then returned late collects both — from the same line, on the same shipment, as two separate daily rates. Demurrage and detention sets out which is which.

Why did my free time run out earlier than I expected? #

Almost always because the vessel berthed ahead of schedule. The clock runs from discharge, so an early arrival shortens your window by exactly as much as it gained — and nobody sends a correction to the plan you built against the original ETA.

When is the right moment to ask for a waiver? #

While the container is still in the yard and the delay is still the line’s to explain. A waiver is a commercial decision someone can make while the charge is still avoidable; once it has been invoiced it is booked revenue, and you are asking for a credit note instead. Bring the specific cause — a late berth, a mis-stowed box — rather than a general appeal, and expect nothing for a document that wasn’t ready on time.

How much free time should I expect? #

Typically 5–7 days for dry containers and 2–4 for reefers at destination, but it is set by your contract with the line rather than by the port. Check yours; assuming a standard number is how importers discover theirs was shorter.

Does detention stop when I unload the container? #

No — when the empty is returned to the depot the line nominates. A stripped container sitting empty in your yard is still accruing detention.