Dray Insight
Demurrage vs detention
Both are daily charges for keeping a shipping container too long. The difference is where the container is. Demurrage runs while the loaded container sits inside the terminal past its free time. Detention, often called per diem, runs while the container is outside the terminal, until the empty comes back.
One way to remember it: demurrage is for the box waiting at the dock, detention is for the box out on the road or at the customer’s door. A slow import can pay both, one after the other.
Demurrage, detention, per diem and storage side by side
| Demurrage | Detention / per diem | Terminal storage | |
|---|---|---|---|
| Where the container is | Inside the terminal, loaded (or an export waiting to load) | Outside the terminal: on a chassis, in a yard or at the customer | Inside the terminal |
| When the clock starts | When free time at the terminal runs out, usually counted from discharge | When the container leaves the terminal, then free days run out | When the terminal’s own free time runs out |
| When it stops | When the container is picked up | When the empty is returned | When the container is picked up |
| Who sets it | The ocean carrier, in its tariff or your contract | The ocean carrier, owner of the container | The marine terminal |
| Who usually gets billed | The importer or its customs broker or forwarder | The importer, or the trucker through the equipment interchange (per diem) | Whoever picks up, often passed to the importer |
| How a dray carrier handles it | Pull the box fast or prepull it to the yard before free time ends | Deliver, unload and return the empty inside free days | Same as demurrage: get the box off the terminal |
Terms vary by contract and port. In Europe and Asia a combined charge is common; in the US, per diem is the usual name for detention billed to the trucker. Always check the ocean carrier’s tariff and the terminal’s rules for the box you are moving.
Demurrage and detention calculator
Enter the free days and daily rate for each charge and how many days the container spent in each place. The rates start as an example; use the ones from the carrier’s tariff or your contract. Many tariffs charge more per day after the first few days past free time, so add a second tier if yours does.
Drayage carriers pass these through as accessorials. Put them in your quote and on the rate confirmation so nobody argues about them later.
How to avoid demurrage and detention
Your rights on a demurrage or detention bill
In the US, the Ocean Shipping Reform Act of 2022 and the Federal Maritime Commission’s billing rule set out what a valid demurrage or detention invoice has to include, such as the container number, the free time, the dates charges started and ended and the daily rate. Ocean carriers have to send the bill within 30 days of the last day charged, and you get at least 30 days to ask for a waiver or refund. A bill that misses these requirements does not have to be paid.
This is a summary, not legal advice. Read the rule and file complaints at the Federal Maritime Commission.
Questions
What is the difference between demurrage and detention?
Demurrage is charged while a loaded container stays inside the terminal past its free time. Detention is charged while the container is outside the terminal past its free time, until the empty is returned.
What is per diem in drayage?
Per diem is the daily charge a trucking company pays the container owner for keeping a container or chassis past the free days in the equipment interchange agreement. It is the trucker-facing name for detention.
Who pays demurrage and detention?
The ocean carrier bills them, usually to the importer or exporter, or to the party named on the bill of lading. Truckers pay per diem under their interchange agreement and pass it to their customer as an accessorial when the delay was not theirs.
How is demurrage calculated?
Take the days the container stayed at the terminal, subtract the free days, and multiply by the daily rate. Many tariffs use tiers, with a higher rate after the first few chargeable days.
What is free time?
Free time is the number of days a container can stay at the terminal, or out of it, before charges start. It is set in the ocean carrier’s tariff or your service contract and can differ for demurrage and detention.
Can you dispute demurrage and detention charges?
Yes. In the US, the Federal Maritime Commission requires invoices to include specific details and to be sent within 30 days, and you have at least 30 days to request a waiver or refund. Charges for days when you could not pick up or return the container are worth disputing.
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