Demurrage

Definition

Demurrage is a charge the carrier or terminal levies when a container stays at the port beyond the allotted free time before it is picked up. It is distinct from detention, which applies to equipment kept too long outside the terminal.

Why it matters

Demurrage accrues daily and is almost always avoidable with timely customs release and drayage scheduling. It is a direct cost of slow back-office reaction to arrival documents.

Who charges demurrage and why the rates vary

Demurrage is charged by the ocean carrier, not the terminal, even though the container is physically sitting at the terminal. The carrier pays the terminal for storage and passes the cost to the importer at a markup. Rates are set by the carrier's tariff or negotiated service contract and vary by carrier, port, and container size. A 20-foot container typically carries a lower per-day rate than a 40-foot, and rates escalate in tiers: days 1 through 4 at one rate, days 5 through 10 at a higher rate, and so on. Port congestion periods see terminals temporarily increase the free-time threshold or the daily rate, sometimes both.

How demurrage disputes are handled

Carriers issue demurrage invoices after the container is returned. The importer has the right to dispute charges if customs holds, port delays, or carrier-caused issues prevented timely pickup. A successful dispute requires documentation: the date the customs entry was released, any CBP hold dates, the date the drayage appointment was scheduled and completed, and any terminal availability gaps. Without timestamped records, a dispute is a conversation. With them, it is evidence. Forwarders who maintain clean job timelines per container are the ones who recover demurrage charges on justified disputes rather than paying them by default.

The FMC's demurrage and detention rule

The Federal Maritime Commission issued a final rule in 2024 requiring ocean carriers and marine terminal operators to disclose demurrage and detention practices, provide clear invoice itemization, and give shippers a path to dispute charges. The rule did not cap rates but created minimum transparency and dispute-resolution standards. Forwarders acting as the importer's agent are often the ones who receive the invoice and manage the dispute process on the customer's behalf, which makes clean per-job documentation a service differentiator, not just an internal practice.