Demurrage

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What is Demurrage?

Demurrage refers to charges incurred when a container remains at a port or terminal beyond the allowed free time after discharge from a vessel. Once that free period ends, daily fees apply until the container is collected or moved out of the terminal.

The purpose of demurrage is to encourage timely pickup and maintain terminal fluidity, ensuring yard space and equipment remain available for incoming cargo. Extended dwell time can also increase landed costs and disrupt downstream planning, affecting drayage schedules, warehouse receiving windows, and inventory availability.

Rates vary by carrier, port, and container type. Demurrage is structured around:

  • Free time: The number of days a container may remain at the terminal without charge.

  • Daily accrual: Fees charged per container, per day once free time has expired.

  • Terminal control: Charges apply while the container remains under terminal custody after discharge.
     

Common Causes 

  • Documentation issues: Missing or incorrect paperwork delaying release.

  • Customs holds: Inspections or clearance delays.

  • Port congestion: High yard utilisation slowing pickup.

  • Transport coordination gaps: Delays in arranging drayage or pickup appointments.
     

Managing Demurrage

Reducing demurrage exposure depends on preparation and coordination:

  • Pre-arrival documentation: Ensure customs and release paperwork are complete before vessel arrival.

  • Pickup planning: Secure drayage capacity and terminal appointments in advance.

  • Clear communication: Align shipper, forwarder, terminal, and carrier on expected timelines.