Terms such as demurrage and detention are increasingly present in conversations among logistics operators, freight forwarders, and companies that import or export goods. Growing port congestion, reduced free time, and the rising complexity of global supply chains are making these additional charges more frequent than ever.
Understanding what they mean, when they are applied, and how to prevent them is essential for keeping logistics budgets under control and ensuring operational continuity. In this in-depth article curated by Savino Del Bene, we explore the topic in detail.
What are demurrage and detention, and when do the charges apply?
Demurrage is a fee charged by the shipping line when a container remains inside the port terminal beyond the allocated free time. In other words, demurrage applies when cargo is not picked up within the days granted free of charge. Its operational meaning is tied to the carrier’s need to ensure rapid container turnover and avoid congestion on the terminal yard.
Detention, on the other hand, refers to the period during which the container is outside the terminal – for example, during inland transport from the port to the consignee’s warehouse or while it is being returned. Detention charges apply when the container is not returned to the carrier within the agreed timeframe.
The difference between demurrage and detention lies in the container’s location:
- Demurrage = container in the terminal beyond free time
- Detention = container outside the terminal beyond free time
This distinction is essential for understanding how to calculate demurrage and how to estimate detention, both of which directly influence logistics cost management.
Why shipping lines apply demurrage and detention
Shipping lines and port terminals apply demurrage and detention for operational, economic, and infrastructural reasons. Containers are expensive and limited assets, and their availability must be ensured to keep global rotations efficient. When cargo stays too long in the terminal or when a container is not returned on time, inefficiencies arise—costs that carriers offset through dedicated charges.
Additionally, high port congestion, variability in shipping schedules due to events such as blank sailings or operational delays, and the increasing demand for both standard and special equipment place further pressure on carriers. Demurrage is therefore not a penalty in the strict sense but a tool to encourage faster cargo movement and ensure optimal use of equipment.
What is free time and why is it becoming more limited?
Free time is the number of days during which a container may remain in the terminal without generating charges. Free time varies depending on the shipping line, the port of arrival, contractual agreements, and the type of cargo. However, in recent years, a steady reduction in free time has been observed, mainly due to:
- Increased congestion across port infrastructures;
- The need for carriers to accelerate operational cycles;
- Higher container turnover required to support global demand;
- Optimization needs for terminal yards and temporary storage areas.
Shorter free time increases the risk that demurrage and detention will be triggered if activities such as customs clearance, inland trucking appointments, and empty container returns are not coordinated efficiently.
Imports vs. Exports: how demurrage and detention risks differ
Operational dynamics in imports and exports influence exposure to demurrage and detention in different ways.
Imports: customs clearance
In imports, the main risk stems from customs clearance. Document checks, inspections, or delays in issuing certifications can hold the container in the terminal beyond free time, triggering demurrage charges. Failure to book inland transport in a timely manner can also prolong terminal storage.
Exports: returning the container
In exports, the critical point is the timeframe for returning the empty container to the terminal. If the shipper does not return the equipment within the agreed period or if the stuffing process takes longer than expected, detention becomes unavoidable. Here, accurate operational planning is essential to avoid last-minute issues.
Understanding these distinctions helps companies manage demurrage calculations more effectively and anticipate detention-related costs.
The main causes behind demurrage and detention today
The factors contributing to demurrage and detention have multiplied in recent years. The most frequent include:
- Port congestion: often caused by seasonal peaks or extraordinary events that slow down operations;
- Vessel delays: which impact the scheduling of pickup or delivery activities;
- Customs inspections: which keep containers on hold pending further checks;
- Documentation issues: such as errors in commercial invoices or missing certificates;
- Lack of available trucking capacity or appointment slots: which prevents timely pickup or equipment return.
These variables make an integrated view of the end-to-end process essential, allowing businesses to anticipate potential slowdowns and manage each phase of the shipment with precision.
How to reduce the risk of additional charges and improve visibility
Reducing the risk of demurrage and detention requires a proactive approach based on planning, coordination, and continuous monitoring. Handling customs documentation in advance helps prevent containers from remaining in the terminal while waiting for clearance. Likewise, booking inland transport early and using advanced tracking systems enable constant visibility over operational timelines.
A key role is played by the freight forwarder, who coordinates communication between the shipping line, terminal, customs authorities, and truckers. Thanks to their expertise, forwarders can identify potential bottlenecks that may generate extra charges and take corrective actions promptly. In this way, demurrage and detention become manageable components of logistics planning rather than unexpected issues to resolve at the last minute.
Conclusion
A thorough understanding of demurrage and detention – what they mean, their financial impact, and the dynamics that trigger them – allows companies to manage supply chains more effectively and prevent unexpected costs. In an increasingly competitive market marked by operational instability, the ability to anticipate challenges is crucial for maintaining efficiency and reliability in ocean freight operations.
To manage every phase of the shipment effectively and reduce the risk of additional charges, partnering with an experienced and structured logistics provider is the best choice. Savino Del Bene offers comprehensive solutions through its ocean freight services, helping businesses with continuous monitoring and a cost-optimization approach. To request a tailored consultation, contact your local Savino Del Bene representative today.
