Demurrage vs detention: what each charge is, when the clock starts, and how agencies track it

Demurrage, detention and storage: the short answer

Demurrage and detention are both charges for keeping a shipping line's container beyond the free time the line allows. The difference between demurrage and detention is where the box is. In the definitions used in an article in UNCTAD's Transport and Trade Facilitation Newsletter, demurrage is charged for the use of the container inside the terminal past free time, and detention for its use outside the terminal or depot past free time. An import box left in the yard too long runs up demurrage; once collected, it runs up detention if the empty comes back late.

Storage is a third charge that often sits beside them: the terminal's charge for the yard space a box occupies, set in the terminal's own schedule. A storage notice from Victoria International Container Terminal in Melbourne, effective 1 January 2021, is one example: a free storage period, then a charge for each calendar day a container stays. So one box in a yard can count the line's demurrage and the terminal's storage at once, each against its own free time.

The words are not used the same way everywhere. In the United States, the Federal Maritime Commission's rules define demurrage and detention as any charges, "per diem" charges included, that carriers, terminal operators or NVOCCs assess for the use of terminal space or of containers (46 CFR 541.3). There, a terminal operator's charge for its land falls within demurrage and detention. The tariff or contract in front of you decides which meaning applies.

Who sets the charge and who sends the bill

The line sets demurrage and detention, in its published tariff or in the service contract. The FMC's billing rule reflects this: a US invoice must name the rule the daily rate comes from, such as a tariff rule number, a terminal schedule or a service contract section (46 CFR 541.6).

Who owes the charge follows the bill of lading and the contract. UNCTAD's 2022 note on contracts for the carriage of goods by sea, discussing English law, says the shipper stays liable for container demurrage, a consignee who takes delivery becomes liable too, and a bill's definition of "the merchant" can reach further, even to a freight forwarder.

Where a line works through a local agency, a standard agency contract makes billing part of the agency's job. Under FONASBA's standard liner and general agency agreement, approved by BIMCO in 2001, the agent issues delivery orders on the principal's behalf and collects freight and related accounts for the principal. Its fee schedule pays a commission on ancillary charges the agent collects, container demurrage among them.

Free time, and where it is written

Free time is the allowance before any of these charges start. UNCTAD's 2022 note puts it simply: where the carrier provides the container, the bill of lading allows "a certain 'free time' for return of the carrier's container, following which demurrage will accrue on a daily basis". The note uses "demurrage" for the time until the container is returned, the period the newsletter article calls detention.

There is no single number. The line's free days come from its tariff or the contract, the terminal sets its own storage free time, and both differ by line, port and contract. They can be negotiated: the UNCTAD note suggests shippers seek extra free time at ports where returning containers is delayed, and mentions a contractual cap on container demurrage.

Small rules decide a day either way. The Melbourne notice counts the first free day from the day discharge finished if it finished before 06:00, and from the next day if later.

When each clock starts and stops

In general terms, each clock runs between two events the tariff names:

• Import demurrage runs from the end of free time at the terminal, counted from discharge or from when the box is available, until the container gates out.
• Import detention runs from the end of the line's free time for use outside the terminal until the empty is returned to the depot or terminal the line names.
• Export detention runs from the end of the line's free time, counted from when the shipper picks up the empty, until the laden box gates back into the terminal.
• Export storage or demurrage runs from the end of free time, counted from the laden gate-in, until the box is loaded on the vessel.

The US rule shows which dates matter. A demurrage or detention invoice there must state the free days allowed, the start and end dates of free time, the container availability date for imports, the earliest return date for exports, and the specific dates charged. If one of those dates is wrong for a box, the bill is wrong for that box.

Why demurrage and detention bills get disputed

• The box could not move: the newsletter article notes that many delays are not the merchant's doing, citing bad weather, strikes and terminal congestion. The FMC's 2020 interpretive rule weighs whether the cargo was available, whether notice was given, whether government inspections held the box, and whether empties could be returned (46 CFR 545.5). It says detention imposed when empty containers cannot be returned is "likely to be found unreasonable", absent extenuating circumstances.
• The terms were unclear: the same rule weighs how clearly the billing party defined its terms, and how far they differ from the way the words are used elsewhere.
• The dates were wrong: a booking-level date applied to every box, or a gate-out recorded a day late, changes the billable days.
• The bill came late or was incomplete: in the US, as published by the FMC on 20 November 2025 (read 26 October 2026), carriers and terminal operators must issue invoices within 30 calendar days of when the charge was last incurred (NVOCCs, within 30 days of the invoice they receive), and a late invoice, or one missing the required information, removes the obligation to pay that charge (the FMC's statement on the court decision). The billed party has at least 30 days to ask for mitigation, refund or waiver (the FMC's announcement of the rule). The rule's section on who may be invoiced was set aside by the US Court of Appeals for the D.C. Circuit on 23 September 2025; the FMC says the rest remains in effect.

What an agency needs to record for each container

To bill a box correctly and answer a dispute about it, an agency needs that box's own facts, not only the booking's:

• the bill of lading number, container number, equipment type and port of discharge
• the party billed, and why it is liable
• the free days, where they come from (the tariff rule or contract clause), and the start and end of free time
• the event times for that box: discharge and availability, gate-out and empty return on an import; empty pickup, laden gate-in and loading on an export
• the days charged, the rate or rates applied, and the total
• the invoice currency and any exchange rate used
• who recorded or changed each time, and why

Most of this is what the FMC requires on a US invoice.

AVISA, the shipping agency software from BudTech, runs demurrage and detention per container from the times staff record for each box: gate-out and empty return on an import, empty pickup and laden gate-in on an export. Discharge and loading are held once per booking. Free days are set by cargo class, staff enter the line's detention free days from the bill of lading, and the free time is frozen on the delivery order when it is issued, so a later tariff change does not move it. Correcting a recorded time needs a manager, and every change is logged with the old and new time and who made it.

A storage and demurrage watch lists every discharged box still at the terminal, worst first, with the date its free time ends, its billable days and the amount accrued so far, a running figure rather than an invoice. Invoices can be issued in OMR, USD or any currency with a rate on file; a manager enters the rates, and an issued invoice keeps the rates it was issued with.