Demurrage vs Detention: Meaning and How to Count Free Time

Key takeaways

• On liner containers, demurrage is the inside-terminal clock and detention is the outside-terminal clock. Some trades bill the two as one combined charge.
• Charter-party demurrage compensates the shipowner for a vessel past laytime. It is not the same bill as container demurrage.
• On US foreign ocean commerce, 46 CFR Part 541 drops the duty to pay if required invoice fields are missing, or if the invoice is not issued within 30 calendar days after the charge was last incurred.

Demurrage is the charge for keeping a carrier’s container inside the terminal, port, or depot beyond free time. Detention is the charge for holding that same container outside the terminal beyond free time. Neither is ocean freight. Both are compensation for using the box, and sometimes the yard space, longer than the time the tariff or service contract allows. The daily rate, the start date, and whether days are calendar or working days are set by that tariff, not by a worldwide table.

Where the two clocks split

The gate is the dividing line. Demurrage runs while the carrier’s container sits inside the terminal, CY, or depot after free time ends. On import, that is usually from discharge until the full box is gated out. On export, it is from gate-in of the full box until it is loaded, when the cargo arrived earlier than the free window allows. Detention starts once the box is outside. On import it runs until the empty is returned. On export it runs from empty pick-up until the stuffed container is gated back in.

Storage can land on the same shipment and still be a different charge. Some terminals bill separately for use of the facility. Some carrier tariffs fold yard storage into demurrage. Read the charge name before you dispute a total. A few trades do not split the clocks at all and invoice combined demurrage and detention. Check the rule that applies to the port before you assume “inside means demurrage.”

The US Federal Maritime Commission draws a clean line against freight. Under 46 CFR 541.3, demurrage or detention means charges, including per diem, assessed by an ocean common carrier, marine terminal operator, or NVOCC for the use of terminal space or containers, and it does not include freight. That definition governs billing on US foreign ocean commerce. It is not a global rate card.

Why the Korean labels overlap

In Korean practice the same container charge is often called 체선료 or 체화료. The words collide with an older charter-party idea. Vessel demurrage is what a shipowner charges a charterer when the ship stays past laytime. Container demurrage is what a liner charges for a box left inside the terminal. Cargo left past allowed storage is sometimes called 체화료 as well. A bill titled only in Korean does not tell you which contract is in play. The English charge name, plus a container number and a B/L number, separates a yard clock from a ship clock.

Import and export, opposite ends

Leg	Demurrage clock	Detention clock
Import	Full box left inside the terminal past free time, ending at gate-out	After gate-out, until the empty is returned past free time
Export	Full box gated in early and left inside past free time before loading	Empty picked up, then stuffed and returned late, past free time outside

There is no single published free-time number. Dry, reefer, and hazardous boxes differ, and so do ports and contracts. Tariffs also differ on whether the discharge day counts and whether free days are calendar or working days. Reefer rules often allow fewer free days and a higher daily rate, because the box needs power. If the sales contract is silent, the carrier’s published rule is the fallback.

On FCL the container clock reaches the merchant directly. On LCL a consolidation warehouse can add its own storage before any carrier detention appears. The choice between a full box and a share of one is covered in FCL vs LCL.

A counting example

The figures below are not a published tariff. They only show how to multiply days once a rule is assumed. Use the carrier’s rule and the contract rate on a live bill. No won conversion is made.

Assume one import 20-foot dry box, five calendar free days, and a tariff that starts demurrage on the day after discharge is complete. If gate-out falls on day 9 counted from that start date, free time covers five days and four days are chargeable. At an assumed USD 75 a day for the first four chargeable days, demurrage is 4 × 75 = USD 300.

Detention has its own clock. Assume five free days from the day after gate-out, an empty return on day 8, and USD 70 a day. Chargeable detention is three days × 70 = USD 210. The assumed total is USD 510. Gate out inside free time and demurrage is zero, even if the empty comes back late. If the tariff steps up after a set number of days, split the days by band and add the bands.

What to read on the invoice

For US foreign ocean commerce under FMC jurisdiction, 46 CFR Part 541 sets a minimum invoice. Identifying data must include the B/L number, container number, port of discharge on imports, and the basis for treating the billed party as liable. Timing data must include the invoice date, due date, free days, free-time start and end, the container availability date on imports, the earliest return date on exports, and the specific dates charged. Rate data must include the total and the tariff rule, terminal schedule, or service-contract clause the daily rate comes from.

Section 541.7 requires the billing party to issue the invoice within 30 calendar days from the date the charge was last incurred. Miss that window and the billed party is not required to pay. The FMC’s February 2024 final-rule notice also says that leaving out any required item removes the obligation to pay. The rule is US foreign ocean commerce, not an automatic rule for every other port on the rotation. Confirm the current eCFR text before you rely on a section number, because billing rules have been litigated.

Incoterms 2020 do not assign this cost. They allocate risk and the main freight, not who pays once free time is over. An FOB or CIF sentence does not decide the demurrage bill. Put the payer, and any agreed free time, in the sales contract. Risk and cost points by rule are in Incoterms 2020, risk and cost.

Mistakes that create the bill

The first is not checking whether the discharge day or the gate-out day counts as a free day. One day changes the total. The second is assuming weekends never count. Many tariffs switch to calendar days once free time has ended. The third is disputing only carrier demurrage while a separate terminal storage line is the larger amount. The fourth is letting the Incoterm decide the payer. The fifth, on a US bill, is paying before you check that the invoice date is within 30 calendar days of the last charge day and that container number and free-time dates are on the page.

FAQ

Are demurrage and detention the same fee?

No. On liner containers, time inside the terminal past free time is demurrage, and time outside with the box still out is detention. Some trades combine them, and terminal storage can be a third line. Use the charge name and the date range on the invoice.

How many free days do I get?

There is no worldwide number. It depends on dry, reefer, or hazardous cargo, the port, and the service contract, and on whether the start day counts. If the contract is silent, match the invoice to the carrier’s tariff rule.

Does FOB or CIF decide who pays?

No. Incoterms 2020 fix where risk passes and who buys the main freight. They do not fix demurrage or detention. FOB does not automatically push an early export gate-in onto the buyer, and CIF does not automatically leave arrival detention with the seller. The carrier bills the party on the transport contract unless the sales contract says otherwise.

Do I pay a US invoice that arrives after a month?

46 CFR 541.7 says the billing party must issue the invoice within 30 calendar days after the charge was last incurred, and that a late invoice does not have to be paid. The FMC has also said a bill missing required fields does not have to be paid. That regime is US foreign ocean commerce, not a default rule for other trades.

Sources

• eCFR, 46 CFR Part 541, Demurrage and Detention (definition in 541.3, invoice content, issuance deadline in 541.7): https://www.ecfr.gov/current/title-46/chapter-IV/subchapter-B/part-541
• Federal Maritime Commission, Final Rule on Detention and Demurrage Billing Practices, 23 February 2024: https://www.fmc.gov/articles/fmc-publishes-final-rule-on-detention-and-demurrage-billing-practices/
• ICC, Incoterms 2020: https://iccwbo.org/business-solutions/incoterms-rules/incoterms-2020/
• Related: FCL vs LCL · Incoterms 2020 summary