What are demurrage and detention?
Demurrage is the charge paid to the carrier when a container stays in the port or terminal yard beyond the free time the carrier allows. Detention arises when the time between the container leaving the port and being returned empty exceeds the free time. Storage is the charge for the use of yard space paid to the terminal; the three are paid to different parties, each for a different period.
What is the difference between demurrage and detention?
The difference is where the container is waiting. Demurrage runs while the full container is inside the port or terminal yard: it has been discharged from the ship, but it is still in the yard because customs formalities are not finished or the consignee has not collected the cargo. Detention runs after the container has left the yard: the cargo is being unloaded at the consignee's premises and the empty container has not yet been returned to the carrier. The carrier is the creditor of both, because both pay for the occupation of the carrier's equipment, but they count different periods and start at different moments. The demurrage clock stops when the container leaves the port, and at that moment the detention clock starts. In exports the direction is reversed: detention logic applies when the empty container is picked up, and demurrage logic when the full container enters the port. Some carriers combine the two under a single free time; which model applies should be asked at the booking stage.
How is storage different from demurrage?
Storage is a charge for keeping goods that is paid not to the carrier but to the terminal or bonded-warehouse operator. Demurrage and detention pay for the occupation of the carrier's container, while storage pays for the use of the yard and the service. So while a full container waits in the port, two clocks can run at the same time: demurrage accrues to the carrier and storage to the terminal, and two separate invoices arrive. Storage usually does not come with a free time as generous as in the carrier's tariff; terminals charge according to their own published tariff, which follows the port's own rules. The most expensive scenario for an importer is a container whose customs clearance drags on and which collects both demurrage and storage. When the cost of delay is estimated, therefore, the total of three items should be considered, not a single one.
What is free time and when does it start?
Free time is the number of days the carrier allows for using the container free of charge, and it comes from the contract, not from legislation. It is set by the carrier's tariff, the bill of lading terms and any agreement with the shipper, and it varies widely from carrier to carrier, port to port and contract to contract. The clock usually starts on the date the container is discharged from the ship; on the detention side, on the date the container leaves the yard. Tariffs are often tiered: the first days are charged at a lower rate and later days at a clearly higher one, so the cost rises faster than in a straight line the longer the delay lasts. Whether weekends and public holidays are counted also depends on the tariff, so do not assume. Because the Turkish Commercial Code does not define container demurrage separately, the contract and the bill of lading terms decide in a dispute.
How can demurrage and detention be avoided?
A large part of these charges is avoidable; the common causes of delay in practice are documents completed late, no advance plan for returning the empty container, and waiting on the customs side. If the document set is complete before the ship arrives, the whole free time is left for customs clearance. On the contract side too, the Incoterms rule chosen between seller and buyer directly affects this risk: whoever bears the freight and the destination-side processing also determines who receives the invoice for delay.
- Complete the bill of lading and the invoice and packing list set before the ship arrives; on collect shipments, pay the freight in advance.
- At booking, get in writing how many days of free time apply and whether demurrage and detention are counted separately or combined.
- In peak season, or for cargo likely to be selected for a red lane or inspection, ask for extra free time from the start.
- Plan depot and appointment capacity for the empty return before the container is collected; if the return terminal is full, detention keeps running.
- If your warehouse has no unloading capacity, consider moving the cargo out of the container and transferring it.
- Ask the carrier for an extension before the free time ends; requests made after it has expired are rarely applied retroactively.
Who pays these charges?
The party liable to the carrier is the party to the bill of lading relationship, and the carrier claims its receivable directly from that party. Who bears the cost as between buyer and seller is determined by the sales contract and the Incoterms rule chosen, but this internal arrangement does not bind the carrier. In practice the cause of the delay is examined: waits caused by missing or wrong documents fall on the shipper, and waits caused by customs and collection fall on the consignee. When the invoices arrive, the sequence of dates becomes critical; the discharge date, the date of leaving the yard and the date of the empty return must be provable with documents. If an invoice is to be disputed, the basis is whether the tariff the carrier applied is consistent with the contract and the bill of lading terms, so it is advisable to keep the correspondence that confirms the free time and the tariff.
Demurrage, detention and storage compared
| Item |
Where it arises |
To whom it is paid |
What period it counts |
| Demurrage |
In the port or terminal yard, while the full container waits |
The carrier (shipowner or agent) |
From discharge until the container leaves the yard, for the days beyond the free time |
| Detention |
Outside the yard, while the container is under the consignee's control |
The carrier (shipowner or agent) |
From leaving the yard until the empty container is returned, for the days beyond the free time |
| Storage |
In the terminal or bonded-warehouse yard |
The terminal or warehouse operator |
The time the goods stay in the yard, charged according to the tariff |
Frequently asked questions
Can demurrage and detention run at the same time?
Not under the classic separate tariff: demurrage stops as the container leaves the yard, and detention starts at that moment. Some carriers, however, apply tariffs that combine the two under a single free time. Demurrage and storage, on the other hand, can run at the same time: one is paid to the carrier and the other to the terminal, and two separate invoices arrive.
How long is the free time?
There is no fixed legal period; it is set by the carrier's tariff, the bill of lading terms and any agreement, and it varies widely. Instead of guessing, get it confirmed in writing at the booking stage, and ask whether weekends and holidays are counted.
Can a demurrage invoice be disputed?
Yes. The basis for a dispute is usually that the period was counted wrongly or that the tariff applied does not match the contract and the bill of lading terms. Keep the documents that show the discharge date, the date of leaving the yard and the date of the empty return. Because Turkish law does not define container demurrage separately, the contract terms decide in a dispute.
I cannot return the empty container. Does detention keep running?
Yes. Detention runs until the container is actually returned to the carrier; a full return terminal or the lack of an appointment does not stop the clock. The plan for the empty return should therefore be made before the container leaves the port, and an alternative return point should be discussed with the carrier in advance.