COSTS
Detention & Demurrage
Fees charged when containers are held beyond the allowed free time at a terminal (demurrage) or when a carrier's equipment is held beyond a set time (detention).
Detention and demurrage are two distinct but related fees that represent a major cost risk in drayage operations. Understanding the difference is essential for freight brokers, importers, and logistics managers.
Demurrage is charged by the shipping line (or terminal) when a container is not picked up from the terminal within the allotted free time. Free time typically ranges from 3 to 5 calendar days after the vessel discharge date. Once free time expires, demurrage accrues daily — often $150 to $300 per day for the first week, escalating to $400 to $600 per day or more at congested ports. Demurrage is billed to the cargo owner or freight forwarder, not the carrier.
Detention is charged by the carrier when their equipment (the chassis, or sometimes a container they are responsible for) is held at a consignee's facility beyond the agreed free time. If a drayage carrier drops a container at a warehouse and the warehouse takes 5 days instead of 2 to unload and return it, the carrier charges detention for the excess days. Detention is billed to the shipper or consignee.
Together, detention and demurrage represent one of the largest non-transportation cost exposures in containerized freight. During the 2021–2022 port congestion period, US importers paid an estimated $7+ billion in combined detention and demurrage charges. Selecting drayage carriers with strong terminal relationships, first-available dispatch, and active port appointment systems is the most effective way to reduce demurrage exposure.