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 guide covers where the money goes and what stops it. If you need the definitions first, start with what demurrage is and how it differs from detention.

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 more expensive than people expect. 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 use up 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, demurrage is not a risk. You will pay it on every shipment, whether or not anyone has noticed.

The original B/L is in a courier bag. Documents travel separately from the cargo and sometimes arrive after it.

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, it is too late to act.

This is what tracking is for. The discharge event matters far more than the dot on the map.

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 causes the most surprises: seven combined days sounds generous until clearance eats five of them and you are on detention from the moment the box leaves the gate.

Get the documents moving early #

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 the risk of demurrage while you wait for an original B/L.

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 sets your free time partly by how promptly you return equipment, so a good return record gives you something to negotiate with.

Lines do this for commercial reasons: 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 way to keep your own future costs down.

If the invoice has already arrived #

Challenge it before you pay it, and before the box is gated out. Once the charge is paid and the container is back with the line, you are asking for a credit note rather than negotiating a charge, and that is a slower conversation with different people. Disputing a demurrage invoice sets out what to put in writing and when.

Work out what it costs you #

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 not worth changing a process for, or it is one of their larger controllable costs. In the second case it has usually never appeared on anyone’s report, because it arrives as scattered invoices.

Either answer is useful. The only bad position is not knowing.

Seeing the clock on your own containers #

Everything above depends on two facts reaching you in time: the day the box was discharged, and how many free days it has. Trackberry keeps both on each of your ocean containers. Demurrage and free time in our docs covers the setup.

It runs two clocks per container. Demurrage counts from the discharge the carrier reports until gate-out, and detention from gate-out until the empty is returned. Only events that have actually happened start or stop a clock. An estimated discharge never starts one, and a vessel that berths early moves the count as soon as the carrier reports the discharge, not when the invoice arrives.

The free days come from you, because they come from your contract. Enter them once per carrier and every container on that line follows. Change them on a single shipment when one booking has different terms. Or forward the carrier’s arrival notice, and the days are read from it. A notice that quotes only a combined allowance is shown but not counted, because it does not say which clock the days belong to.

Terms are counted in calendar or working days. Working days skip weekends and the national public holidays of the country where the clock started.

What you get back is a countdown for each container on the shipments list. An At risk tab lists every shipment with a container still in the terminal and two free days or fewer left, or already over. And you get a warning at two days left, then again on the last free day.

Two limits are worth knowing before you rely on it. With no terms entered, the clock can only count days since discharge: it can tell you a reefer has been in the terminal for four days, but not whether that is too long. And the warning covers demurrage only. Detention shows in the countdown but sends no alert, so the empty return still needs someone to own it.

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 based on the original ETA.

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

While the container is still in the yard and the line still has to explain the delay. 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. It stops when the empty is returned to the depot the line nominates. A stripped container sitting empty in your yard is still accruing detention.