Understanding demurrage and detention to avoid extra shipping fees
Demurrage and detention charges are common in global shipping. These costs can be controlled through careful planning and efficient logistics management.
In logistics, freight costs extend beyond shipping fees, duties, and taxes.
Hidden in the fine print are two charges, demurrage and detention, which can increase the cost of a shipment.
These fees can catch you off guard because they aren’t part of the original freight quote. Instead, they appear much later in the shipping process.
Demurrage and detention fees are meant to keep cargo moving through busy ports, rail yards, and airports.
However, when paperwork is delayed, transportation is unavailable, or customs clearance doesn’t happen fast enough, the charges start to add up.
That’s why understanding demurrage and detention is essential for anyone moving goods internationally.
In this article, we explain what they are, how they differ, and how to keep your shipping costs under control.
What is demurrage?
Demurrage is charged when containers stay inside a terminal longer than the free time allowed by the carrier. This can happen at a port, airport, or rail yard.
Free time varies depending on the carrier, destination, and type of cargo. If a shipment goes beyond the permitted timeframe, fees start to apply.
The goal of demurrage is to keep terminals from filling up with idle containers, especially when space is limited, and carriers want their containers moving.
What is detention?
Detention applies when the carrier’s equipment, including containers, is kept outside the terminal longer than the free time allowed.
Simply put, detention charges are incurred when the container has been picked up but not returned.
The purpose of detention is to make sure equipment moves efficiently. Carriers need their containers back to serve other customers, and holding onto them too long can cause delays.
The differences between demurrage and detention
The main difference between demurrage and detention is where the delay happens.
Demurrage applies when a container is delayed inside the terminal, while detention applies when it is delayed outside the terminal.
Demurrage and detention also vary depending on the mode of transport.
In ocean freight, demurrage charges are common because container terminals usually have limited space.
In air freight, airlines usually charge storage fees when cargo stays in their terminals beyond the free period allowed. Detention may also apply if ULDs (Unit Load Devices), such as pallets or containers, are not returned on time.
Rail freight works similarly to ocean shipping. Rail terminals may charge demurrage if containers are not collected within the free period, and detention if carrier equipment is not returned promptly.
Demurrage and detention vs. storage fees
Sometimes, charges for demurrage and detention are confused with charges for storage, which is another fee that applies when cargo remains in a terminal or warehouse too long.
While related, storage fees are different because they are charged by the facility for the space your cargo occupies, not by the carrier for the use of its equipment.
How to avoid high demurrage and detention fees
You can reduce the risk of incurring high demurrage and detention fees by:
- Preparing customs documents in advance to avoid clearance delays
- Booking trucking and drayage services ahead of time so containers are moved promptly after arrival
- Tracking shipments closely to gain visibility and act quickly if issues arise
- Negotiating extra time with carriers, when possible, especially for complex or high-volume shipments
- Working with an experienced freight forwarder who can coordinate between carriers and customs to prevent bottlenecks
How Cole International can help
At Cole International, we provide freight forwarding solutions to help businesses like yours navigate the entire shipping journey and avoid costly demurrage and detention charges.
With the right planning, additional fees can be prevented, and our team can work with you to ensure shipping containers move quickly and efficiently through every stage of the supply chain.
Here’s how we can help:
- Review your shipment details and identify where demurrage or detention risks may arise
- Coordinate customs clearance and documentation to prevent cargo from sitting idle
- Arrange transportation in advance to ensure prompt container or equipment pickup and return
- Monitor shipments closely and keep you informed so you can act quickly if issues occur
Our goal is to help you ship your goods smarter and faster.
Please reach out to one of our trade professionals to ensure demurrage and detention fees don’t affect your next shipment and for guidance on keeping your shipping costs under control.
