Demurrage
What Is Demurrage?
A demurrage is a daily charge that an ocean carrier applies when a container stays inside the port terminal beyond the free time allowed after discharge. The carrier owns the container, and the terminal charges for the space it occupies. Free time usually runs two to five days from the date the container is unloaded from the vessel. Past that window, the carrier bills a per-day rate until the container leaves the terminal.
The charge is not a penalty in the legal sense. It exists because a container sitting in the yard holds space the terminal needs to keep other cargo moving. The carrier also cannot put that box back on a vessel or hand it to another customer until it is collected.
Demurrage applies to the container itself, not to loose cargo. It is a destination-side charge in most cases: it starts at the port of discharge, after the container is off the vessel. It is separate from THC, which covers the normal handling of the container through the terminal.
Demurrage is also distinct from detention. Detention applies after the container leaves the terminal — the charge for keeping the carrier’s box at a warehouse or factory past the agreed return date. Demurrage covers the days the container is still inside the terminal. The two are often billed together on the same invoice, which is one reason they are easy to confuse.
How Demurrage Is Charged
Free time is set by the carrier and the port. A common range is two to five days after discharge, and some carriers allow seven days on certain lanes. The free days count from the date the container is discharged from the vessel — not from the date customs releases the paperwork.
After free time ends, the daily rate rises in tiers — the longer the container sits, the more each extra day costs. This example shows the tier pattern:
| Days past free time | Rate tier | Typical daily rate |
|---|---|---|
| Day 1–3 | Tier 1 | USD 75–100 |
| Day 4–7 | Tier 2 | USD 100–150 |
| Day 8+ | Tier 3 | USD 150–200+ |
These numbers are an illustration. The exact amounts are set by the carrier’s tariff, quoted per container — a 40ft usually costs more than a 20ft — and can differ sharply between ports and carriers.
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