Demurrage
Demurrage is a penalty fee charged by a shipping line (or terminal) when a container or vessel remains at the port/terminal beyond the agreed "free time" — the period during which use is included in the freight rate.
For containers, demurrage typically starts after 3-7 free days from discharge and rises in tiered bands (often US$50-200/day initially, doubling after 7+ days). For vessels, demurrage is paid by the charterer to the shipowner when loading/discharge takes longer than the time allowed in the charter party (laytime).
Demurrage is often confused with detention — they are different: demurrage applies while the container is still inside the port/terminal; detention applies after the container has left the port but hasn't been returned empty to the shipping line's depot within free time.
Both are major sources of supply-chain cost leakage. AI-augmented freight platforms can predict demurrage exposure per container and trigger preventive action — earlier discharge, repositioning, or contract re-negotiation — before charges accrue.
Demurrage and detention (together, "D&D") are among the largest avoidable costs in container logistics — usually invisible until the invoice lands. A single stuck container can cost hundreds or thousands of dollars, and across many shipments the leakage adds up fast. Understanding exactly how the clock works, and predicting exposure before charges start, turns an ugly surprise into a controllable cost.
A 40ft container is discharged on 1 March with 5 free days. It clears customs and leaves the terminal on 10 March — that is 9 days at the terminal, minus 5 free = 4 charged days. If the line charges US$120/day for the first 3 days and US$240/day thereafter:
Demurrage = (3 × $120) + (1 × $240) = $360 + $240 = US$600 for that single container.
What is the difference between demurrage and detention?
Demurrage applies while the container is still inside the port/terminal past free time. Detention applies after it has left the port but has not been returned empty to the line's depot in time. Together they are called "D&D".
Who pays demurrage?
Usually the consignee (importer) or whoever controls clearance of the container, though it depends on the Incoterms and the contract of carriage.
Can demurrage be avoided?
Largely, yes — by clearing customs early, pre-arranging onward transport, and tracking free-time expiry. AI-augmented platforms predict which containers are at risk and flag them before charges begin to accrue.