Few lines on a freight invoice cause as many arguments as demurrage and detention. They are often billed together and often confused, but they measure two different things. Knowing which clock is running, and who controls it, is most of what it takes to keep both off the invoice.
Two charges, two places
Demurrage applies to a loaded container that is still inside the port or terminal after its free time has run out. On an import, the clock starts when the box is discharged from the vessel and stops when it leaves through the gate. On an export, it can apply when a full container is delivered to the terminal too early, or stays there because it missed its vessel.
Detention applies to the carrier's equipment while it is outside the terminal. On an import, the clock starts when the full container gates out and stops when the empty is returned to the depot the line nominates. In the United States the same charge is commonly called per diem.
A third charge sits beside them. Storage is billed by the terminal operator for the space the container occupies. It is not the shipping line's charge, it has its own tariff, and it can run on the same days as demurrage.
| Charge | Billed by | Clock starts | Clock stops |
|---|---|---|---|
| Demurrage (import) | Shipping line | Discharge from vessel | Full container gates out |
| Detention (import) | Shipping line | Full container gates out | Empty returned to depot |
| Storage | Terminal operator | End of terminal free period | Container leaves terminal |
Some carriers sell a combined allowance — one pool of free days covering both the time in the terminal and the time out of it. That is usually easier to manage than two separate allowances, because a fast pick-up buys extra days for unloading.
How free time works
Free time is the number of days the shipper or consignee may use the container without charge. It is set by the carrier's tariff, varies by port, direction and equipment type, and is normally shorter for reefers and special equipment. Whether weekends and public holidays count depends on the tariff: some count calendar days, others working days.
After free time, charges are per container, per day, and almost always tiered — the daily rate steps up the longer the box stays. That structure is deliberate. The charges exist to get equipment back into circulation, so the cost of a third week is much higher than the cost of the first few days.
Why containers run over
Most overruns trace back to a short list of causes:
- Documents arrive late. The original bill of lading has not been surrendered, or the release has not been issued, so the terminal will not let the box out.
- Customs holds or inspections. The container is selected for examination and the clock keeps running while it waits.
- No truck or no appointment. The terminal's appointment system is full, or the haulier cannot cover the slot.
- The warehouse cannot receive. The box is out of the port but sits on a chassis waiting for a dock door, and detention accrues.
- The empty cannot be returned. The depot is full or restricts returns for that line and size.
Keeping both charges off the invoice
Negotiate free time before the cargo moves. Extra free days are a normal part of a contract negotiation and cost far less than paying a tiered tariff later. If a consignee is known to unload slowly, price that in at booking.
Clear customs before arrival. Where the customs regime allows pre-arrival filing, use it. A container that is released on the day it discharges has its whole free period available for collection.
Watch the milestones, not the ETA. The clock starts at discharge, not at vessel arrival, and the two can be days apart at a congested port. Container tracking that shows the actual discharge and gate-out events tells you which day the free time really began.
Book haulage against the discharge date. Hauliers and terminal appointments are scarcest when a large vessel has just worked. Booking as soon as the vessel's berth window is firm protects the first free days.
Plan the empty return. Confirm which depot accepts the empty before the driver leaves the warehouse. A refused return is detention you did not cause but will be billed for.
When the invoice is wrong
Charges that accrue while the container could not be collected for reasons outside the cargo owner's control are worth disputing, and the dispute is stronger with a record: appointment refusals, terminal closure notices, hold and release timestamps.
In the United States the rules are specific. The Federal Maritime Commission's rule on demurrage and detention billing, in force since May 2024, sets out what an invoice must contain, requires it to be issued within thirty days of the charge ceasing to accrue, and gives the billed party at least thirty days to request a waiver or refund. An invoice that omits the required information does not have to be paid. Other jurisdictions rely on the carrier's tariff and the contract of carriage, which is one more reason to read the free-time clause before booking rather than after.
The practical summary is short: agree the free time you need, clear early, track the discharge event, and line up the truck and the empty return before the container lands.
