Demurrage, detention, per diem – what you pay for
The terms are used in different ways, and the exact definitions are always in the carrier's tariff. The most common split (as defined, for example, by MSC):
- Demurrage – a charge for a full container still standing at the terminal after free time. You pay for the space it occupies.
- Detention – a charge for using the carrier's container after free time.
- Per diem – a charge for the carrier's container, full or empty, that is outside the terminal, e.g. at the consignee, and has not been returned on time.
- Storage – a terminal or yard charge for keeping the container.
Put simply: demurrage and storage concern the space, detention and per diem concern the equipment. The charges often run in parallel or one after the other.
How free time is counted
Each carrier states in its tariff how many charge-free days apply – separately for import and export, container type and port. The clock usually starts when the container is available after discharge or when it leaves the terminal, and the daily rate rises with each further period. Know the exceptions: in the USA, for example, Hapag-Lloyd stops the demurrage and detention clock when a container is put on customs hold through no fault of the customer.
What it costs
Rates depend on the port and the carrier and change a lot. According to Container xChange's benchmark, average charges in 2023 fell by 25% year on year and were 14% lower than in 2020. Even so, some major ports, including Antwerp and Rotterdam, remained above their 2020 levels, and US ports were the most expensive. Because the rate rises every day, a few days' delay across several containers quickly adds up to a significant sum.
The invoice – what to check
In the USA, a rule of the Federal Maritime Commission (FMC) under OSRA 2022 has applied since May 2024. Carriers and terminals must issue a demurrage or detention invoice within 30 days of the charge being incurred and may bill only the party to the contract of carriage or the consignee. The invoice must include, among other things, the container number, the availability date, the number of free days and their start and end dates. The customer has at least 30 days to request a reduction or refund. Europe has no such rules and the conditions follow from the tariff and the contract, but it is worth checking the same data on every invoice.
How to reduce charges
- Know your free time. Record for every container when free time starts and ends. Negotiate longer free time for larger volumes.
- Pick up and return on time. The most common cause of charges is a container left unloaded at the consignee or an empty one waiting to be taken back.
- Keep your own dates. To compare with the invoice you need your own record: when the container left the terminal, reached the warehouse, was opened and was returned.
- React to idle time. A container that has stood in one place for two days is a signal to call before free time runs out.
How container monitoring helps
A tracker does not change the carrier's tariff, but it gives you data and time to react:
- Geofences around the terminal, the warehouse and the empty-container depot show the time of departure, arrival and return – without calling the haulier.
- Door-opening alarms show when the container was actually unloaded. They are available, for example, on the magnetic AT410 and the hinge-mounted Tetis.
- Idle alarms remind you of a container that has stood in one place for too long.
- Route history is evidence when querying an invoice, e.g. when the container waited at the terminal because of a customs inspection.
See container monitoring devices or test them with the starter kit. How to track a container in port and at sea is covered in our article on ocean container tracking.