Definition
Demurrage is a charge levied by shipping lines or terminal operators when a container remains at the port or terminal beyond the agreed free time after arrival. It is essentially a storage fee for occupying terminal space.
Why it matters for traders
Demurrage and detention charges can quickly erode deal margins. Daily rates range from USD 50 to USD 200+ per container. A single delayed container can cost thousands in charges — directly reducing your profit.
Demurrage vs Detention vs Storage
| Charge | When it applies | Charged by |
|---|---|---|
| Demurrage | Container at port beyond free time | Shipping line |
| Detention | Container outside port beyond free time | Shipping line |
| Storage | Container at terminal beyond free time | Terminal operator |
How to avoid demurrage
- Track vessel ETA and plan customs clearance in advance
- Ensure all documents are ready before the vessel arrives
- Use a responsive customs broker
- Negotiate extended free time with the shipping line
- Monitor container status daily
- Plan inland transport to pick up containers promptly
Operational example
A container arrives at Dar es Salaam port with 7 days of free time. Due to missing certificate of origin, customs clearance takes 10 days. The importer pays 3 days of demurrage at USD 100/day = USD 300, plus terminal storage charges. This could have been avoided by having the certificate ready before vessel arrival.