Freight Surcharge Decoder — Demurrage and Detention

Most shippers track ocean freight rates, BAF, and THC carefully. But demurrage and detention (D&D) charges can quietly accumulate thousands of dollars in addition to your freight quote — especially when shipments face customs delays, port congestion, or appointment backlogs. This guide explains how D&D works and how to prevent runaway charges.

Demurrage: The Storage Clock

Demurrage is charged when a container sits at a port terminal beyond the allocated free time. Once your container is discharged from the vessel, the terminal starts a clock:

• Free time: 2–7 days (varies by port and carrier)
• Day 1–3 after free time: $50–$150 per container per day
• Day 4–7: $100–$300 per container per day
• Day 7+: $200–$600+ per container per day (storage escalates rapidly)

Demurrage Rate Comparison by Port

Port	Free Time	Day 1–3 Rate	Day 4–7 Rate
Shanghai / Ningbo	5–7 days	$50–$80/day	$100–$200/day
Los Angeles / Long Beach	3–5 days	$100–$150/day	$200–$400/day
Southeast Asia	3–5 days	$40–$80/day	$80–$150/day
Rotterdam / Hamburg	5–7 days	$60–$100/day	$120–$250/day

Detention: The Equipment Clock

Detention is charged when a container is held beyond the free time after being released from the terminal — i.e., when your cargo has been picked up but not returned to the carrier's depot. Detention applies once the container is off the terminal:

• Free time: typically 3–5 days
• After free time: $50–$200 per container per day

Demurrage vs Detention: Key Distinction

• Demurrage = container at the port terminal (on terminal property)
• Detention = container off terminal but not returned to depot (in importer's possession)

Why D&D Charges Spiral Out of Control

The most common causes of high D&D charges:

• Customs holds — FDA holds, customs inspections, or document review
• Port congestion — no available appointments at the rail ramp or delivery window
• Missing documentation — commercial invoice discrepancies, packing list errors
• Consignee delays — importer not ready to receive the shipment
• Imperfect competition — container availability issues at empty depot returns

Real Cost Example: A Single Week Delay

A 40ft container delayed at Los Angeles port for 7 days beyond free time (assuming 5 days free):

• Demurrage: 2 days × $150 = $300
• Extended demurrage (days 3–7): 5 days × $300 = $1,500
• Chassis rental (if applicable): $50–$100/day
• Total D&D for one container: $1,850–$2,100

Preventing D&D Charges

• Verify all import documents before shipment — HS code accuracy, commercial invoice values, country of origin
• Pre-file ISF 72 hours before departure (for US imports) — late ISF filings trigger customs holds
• Book chassis and appointments in advance — port appointments book up days ahead
• Maintain buffer free time in your shipping schedule — don't assume the container will be available on day 1
• Negotiate extended free time — large volume shippers can often get 5–7 days free demurrage from carriers
• Use D&D insurance — some freight insurance policies cover demurrage and detention costs

The FMC D&D Reform

In the US, the Federal Maritime Commission (FMC) introduced new Demurrage and Detention billing transparency rules in 2024. Carriers must now clearly identify the party responsible for D&D charges on the bill of lading, and billing disputes must be resolved within 30 days. This has improved accountability but hasn't eliminated the charges.