Short answer
Demurrage is the charge the carrier levies for a full container that remains in the terminal yard after free time has expired. Detention applies once the container has left the terminal and is not returned empty within free time; on exports, the clock starts when the empty container is picked up from the depot and stops when the full container is delivered to and accepted at the port or terminal. The distinction turns on where the container is: inside the yard is demurrage, outside the yard is detention. Both are usually calculated daily on a stepped, rising tariff.
What are demurrage and detention?
In container shipping, the carrier lets the shipper use the container free of charge for a set period. This is called free time. Once free time is exceeded, two separate charges can arise, and a single question decides which one applies: where is the container right now?
Demurrage is the charge that runs while a full container waits inside the terminal yard. A container whose customs process is incomplete, whose delivery order has not been collected, or for which no truck has been arranged cannot leave the yard; the daily charge starts on the day free time expires.
Detention is the charge that runs once the container has left the terminal. The carrier’s equipment stays with the user until it is unloaded and handed over at the return depot. The delay is invoiced as an equipment usage fee.
In short: demurrage runs inside the gate, detention runs outside it.
| Comparison (import flow) | Demurrage | Detention |
|---|---|---|
| Location of the container | Inside the terminal yard | Outside the yard (warehouse, factory, road) |
| Status of the container | Full; awaiting customs or delivery | Being unloaded, loaded, or waiting empty |
| Clock starts | Usually the day after discharge | The moment the container leaves the terminal |
| Clock stops | When the container leaves the terminal | Import: when the empty container is accepted at the return depot. Export: when the full container is delivered to and accepted at the port or terminal |
| Invoice issued by | Carrier / line | Carrier / line |
Storage is a separate line item
The most common mix-up is between demurrage and storage. Storage is the fee the terminal operator charges for occupying yard space; demurrage is the fee the carrier charges for its container equipment. Both can run for the same day, in which case two separate invoices can arrive from two separate parties; however, because the terminal’s own storage free time can differ from the carrier’s, on some days only one of the two may be running. Paying one does not close out the other.
The second mix-up is at the terminology level. In vessel charter contracts, demurrage refers to the amount paid, depending on the charter chain, to the shipowner or the disponent owner when laytime is exceeded. The same word is used for container demurrage, but it is an entirely different contractual relationship.
Free time varies by carrier and contract
There is no standard length of free time that applies to everyone. It is set according to the carrier, the port, the container type, the direction of carriage, and the customer’s volume, and is negotiated together with the freight offer. Points worth knowing:
- Special equipment such as reefer, open top, and flat rack is given shorter free time than a standard dry container; reefer also incurs a plug-in (electricity) charge.
- Some carriers pool demurrage and detention into a single allowance (combined free time). In that case, days spent in the yard also consume the days available outside the gate.
- Most tariffs are based on calendar days; weekends and public holidays count. A business-day basis applies only if the contract states so explicitly.
- Free time should be recorded in writing in the freight contract or booking confirmation, not merely in offer correspondence.
When the clock starts and when it stops
The demurrage clock generally starts the day after the container is discharged from the vessel; the exact start day depends on the carrier’s tariff. Demurrage stops the moment the container passes through the terminal gate, and detention starts at the same instant.
On imports, the detention clock stops when the empty container is delivered to and accepted at the depot designated by the carrier. The critical detail is this: it is not the container leaving the warehouse but its acceptance at the return depot that stops the clock. If the depot refuses it due to being full, or no appointment slot can be found, the days keep running. For this reason, a dated and timed record of rejected return attempts should be kept; in a dispute, this record is the strongest basis for an objection.
Customs delay does not stop the clock
The clock runs independently of the customs status of the goods. An unopened declaration, waiting in line for a red-line inspection, an analysis report, a control certificate, or a missing certificate of origin do not stop the clock. From the carrier’s perspective, the only measure that matters is where the equipment is.
There is a separate time pressure on the customs side. Under Article 46 of the Turkish Customs Law (No. 4458), if no customs-approved treatment or use is determined within 45 days for goods arriving by sea or 20 days for goods arriving by other modes, the goods held at temporary storage become subject to disposal (liquidation) under Article 177. In other words, delay creates a risk not only for cost but for the goods themselves.
How the charge is calculated
The calculation is generally done per container, per day, using a stepped, rising tariff: the first band of days is priced lowest, and subsequent bands are priced markedly higher. Because of this structure, delay cost grows not linearly but at an accelerating rate. A few extra days of waiting on a single container can produce an amount that rivals the freight cost itself.
The tariff varies by container type and is usually denominated in foreign currency. The invoice is issued by the carrier or its agent to the party to the contract of carriage. Incoterms 2020 does not regulate demurrage and detention by name, but its cost-allocation clauses (A9/B9) effectively create a default: destination demurrage generally falls on the seller under the D group (DAP, DPU, DDP) and generally on the buyer under the F and C groups. This should still be set out expressly in the sales contract.
It applies to exports too
Demurrage and detention are not only an import issue. On exports, the detention clock starts the moment the empty container is picked up from the depot; if loading takes longer, the export declaration is not closed, or the container is delivered to the port late, days start running; the clock stops when the full container is delivered to and accepted at the port or terminal. If the container enters the port but waits before being loaded onto the vessel — due to capacity cancellation, a skipped sailing, or a missing VGM declaration, for example — demurrage and storage can arise together in the yard.
Common mistakes and precautions
- Preparing documents around the vessel’s arrival. The bill of lading, invoice, packing list, and certificates of origin/movement should be ready when the vessel departs; the declaration should be prepared before arrival.
- Leaving the delivery order to the last day. The delivery order is not issued until freight, THC, and any deposit have been paid in full. This waiting period turns directly into demurrage.
- Not extending free time in the contract. Free time is negotiated together with the freight rate. For product groups with a long customs process, requesting extra days upfront is cheaper than paying demurrage later.
- Not planning the empty return. The return depot and appointment time should be confirmed before the container is unloaded; the carrier may change the return point.
- Not monitoring port congestion. Strikes, weather conditions, terminal capacity, and appointment scarcity eat into free time. In busy periods, plans should be built around the actual yard situation, not the vessel’s scheduled arrival date.
- Holding the container longer than necessary. If the customs process is going to take longer, consider unloading the goods into a bonded warehouse (antrepo). This stops the demurrage clock, but detention keeps running until the empty container is returned. Before deciding, the transfer, transport, handling and bonded-warehouse declaration costs and the warehouse storage tariff should be compared with the remaining demurrage/detention risk.
- Raising an objection too late. Correspondence with the carrier should happen while the delay is occurring, not after the invoice arrives. Rejected return attempts, terminal appointment records, and customs inspection dates, together with correspondence with the carrier, appointment-system screenshots and depot gate-refusal records, should be kept as written evidence.
These two cost items usually arise not from price differences but from planning errors. Running declaration preparation, the delivery order, and the empty return on the same calendar as the vessel’s movements requires sea freight and customs brokerage processes to be planned together rather than separately.
This page is general information, not legal advice. Regulations change; confirm the current position before acting.