Demurrage vs detention: who charges what, and when

Two charges dominate the paperwork after a container moves: demurrage and detention. They sound interchangeable, are often billed on the same invoice, and are governed by different clocks. For a shipper or forwarder, the distinction decides who owes what, and when.

The core distinction

Demurrage applies to a loaded container that remains at the marine terminal beyond the free time allowed. Detention applies to the container itself once it has left the terminal: the equipment is held beyond the agreed free time and the carrier cannot put the box back to work. Demurrage is about terminal space. Detention is about the equipment.

Who charges what, and to whom

The merchant, the party named on the bill of lading, normally the shipper, consignee or the forwarder acting for them, is the liable party for both charges. Who issues the invoice depends on the port and on who controls the box. In the United States, marine terminal operators commonly bill demurrage directly to the merchant, while the ocean carrier bills detention. In many other markets the carrier invoices both. Detention is nearly always a carrier charge, because the line or its lessor owns the equipment.

An NVOCC that issues its own house bill is the merchant to the underlying carrier for D&D, and recovers from its customer under separate terms. A freight forwarder that only arranges transport is usually not the contracting party at all, unless it signed as shipper or consignee.

How free time is defined and counted

Free time is the period granted before charges begin. It is quoted per container, sometimes per bill of lading, and counted either in calendar days or in working days that exclude weekends and holidays. The two conventions can differ by several days on the same shipment, so the tariff wording matters. Free time is published in the carrier’s tariff, restated in the service contract, and is one of the few commercial terms a shipper can negotiate.

The demurrage clock starts when the container is discharged or becomes available for pickup, as the tariff defines it. The detention clock starts when the container leaves the terminal gate and runs until the empty is returned to a nominated depot. The clocks can therefore overlap: a box can accrue detention while a demurrage dispute over availability is still open.

Import and export cycles

On import, demurrage covers discharge to gate out, and detention covers gate out to empty return. On export, the sequence reverses. Detention covers the inland leg from the shipper’s premises to the terminal gate, and demurrage covers the period from gate in until the box is loaded on board. Exporters tend to underweight that leg, since a missed vessel cutoff leaves a loaded container at the terminal.

What drives the charges

Customs examinations and holds rank high, followed by late or incomplete documentation, chassis and trucking shortages, booked terminal appointment slots, gate congestion, and delays in the rail or warehouse leg. Detention often traces to slow stripping and reloading at the consignee’s facility, or to a depot that will not accept an empty return. Many of these triggers sit outside the merchant’s control, which is why the regulator treats them as relevant to billing disputes.

How the charges are structured

Carriers publish tiered tariffs. The daily rate is lowest in the first tier after free time expires and rises in steps the longer the box is held, with separate tiers by equipment type and size, reefer above dry. Some carriers sell a combined demurrage and detention product, often called D&D or a per diem structure, in which one free time and one tariff cover the whole cycle.

The chain of liability

The carrier sets the tariff and controls the equipment. The terminal operator controls the gate, appointments and availability, and in the United States it may invoice demurrage directly. The NVOCC sits between the carrier and the cargo owner. The freight forwarder arranges movement and documents. The beneficial cargo owner carries the commercial cost. Liability follows the contract rather than operational fault, so the party that caused a delay is not always the party billed.

Mitigation

Start with documentation: file accurate bills of lading, packing lists and customs entries before arrival, and use pre clearance where a port offers it. Book terminal appointments as soon as the vessel is scheduled so slots do not disappear. Plan empty returns around the depot’s opening hours and chassis availability. Negotiate free time, combined D&D and tier caps into the service contract rather than accepting the published tariff. When a charge is driven by a terminal, carrier or appointment failure, keep dated evidence and escalate through the carrier’s customer service or dispute channel.

Regulatory attention

The US Federal Maritime Commission has tracked these charges since 2014 congestion forums and a 2015 staff report on rules, rates and free time. Fact Finding 28 (2018) led to the Interpretive Rule on Demurrage and Detention under the Shipping Act, finalized in May 2020, which set out the incentive principle: the charges should promote freight fluidity rather than function as a revenue source. A 2022 advance notice of proposed rulemaking followed on billing requirements. Nine carriers report D&D data to the FMC quarterly; the commission’s detention and demurrage page records roughly 15.4 billion US dollars collected between April 2020 and March 2025. The underlying terms are defined in the World Shipping Council glossary, and the rule text sits in the Federal Register.

Why it matters beyond one invoice

D&D is a landed cost line that behaves like a penalty: the more fluid the container’s journey, the smaller it is. Understanding the two clocks, and which one is running, gives a shipper the basis to question a charge and a practical reason to keep the box moving. The same operational literacy runs through our explainers on What is a blank sailing? and What is TEU? The unit container shipping runs on.