Detention, demurrage and storage – what are these charges and how to avoid them?

Importing goods from third countries is a process that requires not only good logistics but also an understanding of the rules for calculating additional charges. In sea transport and rail transport, terms such as demurrage, detention and storage often appear. Although at first glance they may seem similar, each term means something different and relates to a different stage of container handling. Find out what these charges are, when they are applied and – most importantly – how to avoid them.

What is demurrage?

Demurrage charges are fees imposed by the shipping line for keeping a container at the port terminal beyond the so-called free time period. These are charges related to the use of terminal space by the container, regardless of the importer’s fault, and they are typically applied in sea transport.

Free time is a specific period during which the consignee can collect the container after it has been unloaded from the vessel without incurring any charges. Once the consignee takes possession of the container, the free time ends, and the process of calculating demurrage charges is directly linked to the moment the container is collected.

If, for any reason, the collection is delayed – for example, due to ongoing customs clearance, lack of warehouse space, delays in inland delivery, delays in taking possession of or collecting the container, or other logistical issues – the shipping line will start charging a daily fee for each day the container remains at the terminal.

Demurrage charges are applied after the free time days have elapsed, and their amount may increase with each additional day the container remains at the terminal. A container’s stay at the terminal beyond the free time period generates extra costs.

It is worth noting that the length of free time is specified in the contract and depends on various factors such as: the container owner (shipping line), type of cargo, port (each port has different rates), and contract terms. To avoid demurrage charges, it is important to plan the transport of goods carefully before they leave the port of loading.

Demurrage charges are imposed by the shipping line for holding a container at the port terminal, and their purpose is to motivate consignees to collect their cargo quickly and to minimise delays in the supply chain.

Downtime in sea and rail transport – rules for calculating demurrage charges

Demurrage charges are applied after the expiry of the previously mentioned free time period (for example, 5-7 days from the date the full container is placed at the terminal) and increase progressively.

In imports, demurrage charges are usually applied after a specific period from the moment the full container is placed at the terminal, and their calculation depends on when the consignee collects the container and on any delays in picking up the cargo. This means that if the importer does not start the container collection procedure within the specified time, they will be charged additional costs for each subsequent day the container remains at the terminal.

Demurrage charging system

The demurrage charging system is based on daily rates and the number of days of delay beyond the agreed free time. It is worth noting that demurrage rates may increase as the days pass after exceeding the free time period. These rates can vary – for example, they may be higher after the 5th or 10th day – and depend on the type of container and the shipping line’s policy.

Example:

• Date the full container was placed at the port: 1 August
• Free time: 5 days
• Container collected: 10 August
• Container dwell time: 4 days (6-9 August)
• Demurrage rate: EUR 60/day
  Total demurrage charge: 4 days × EUR 60 = EUR 240

Remember that different shipping lines have different rates and deadlines – it is worth knowing them before starting the import process to avoid misunderstandings and additional costs.

In what situations can demurrage charges be applied?

Remember that importing goods is a complex process, which is why it is so important to plan it with an experienced freight forwarding company. Neglecting the following points almost guarantees an unpleasant surprise in the form of demurrage charges:

• Lack of complete transport documentation, resulting in prolonged customs clearance
• No available means of transport to move the container
• Delay in notifying the container for collection
• Delays related to the delivery of goods or the consignee taking possession of the container

We remind you that the process of calculating demurrage charges depends on the moment the consignee takes possession of the container and on any delays in collecting the goods.

Detention – what is it?

Detention is a charge applied for delaying the return of a container and for using it outside the container yard after a specific deadline has passed. Below you will find an explanation of when detention is charged in imports and when it applies in exports.

Detention in imports

In the case of imports, detention charges are applied when the importer collects a full container from the port and transports it to their warehouse or distribution centre but does not return the empty container within the agreed period. In this situation, the container formally belongs to the shipping line and should be returned to the terminal or designated depot as soon as possible. A delayed return means that the shipping line cannot use this container for the next shipment – which is why it charges a fee for each additional day.

Example:

• Container arrives at the port on 1 August and is collected by the importer on 3 August
• The shipping line grants 7 days of free time for returning the empty container
• The empty container should be returned by 10 August
• It is returned only on 13 August
  The importer will incur detention charges for 3 days (11-13 August)

It is worth noting that delays in returning the empty container may be caused, for example, by a lack of available transport, prolonged unloading, or insufficient warehouse space. Regardless of the reason – detention will be charged unless otherwise agreed between the parties.

Detention in exports

In exports, detention charges work the other way around – they apply when the exporter collects an empty container from the terminal to load their goods into it but does not return it within the agreed period. The empty container therefore becomes a production asset of the shipping line that is being kept outside the terminal without the possibility of further use.

If the exporter does not prepare the cargo in time and fails to deliver the container for vessel loading, they may be charged detention fees for keeping the container outside the terminal.

Example:

• The exporter collects an empty container from the terminal on 5 September
• They have 5 days of free time for loading and returning it
• The container should be delivered to the terminal by 10 September
• It arrives there only on 13 September
  The exporter will pay detention charges for 3 days (11-13 September)

Such situations are particularly risky when exporting seasonal goods, non-standard cargo, or shipments subject to inspections, which can delay the preparation of the load. This is why coordination with the warehouse, transport, and freight forwarder is crucial to stay within the free time period.

Detention charging system

Similar to demurrage, detention is based on the number of days the container stays outside the terminal without being returned.

Example:

• Date of collecting the empty container from the port: 2 August
• Free time: 7 days
• Container return date: 14 August
• Delay: 5 days (8-12 August)
• Detention rate: EUR 45/day
  Total detention charge: 5 days × EUR 45 = EUR 225

It sometimes happens that freight forwarders or importers are unaware that the charge has already started to accrue, which is why it is worth using time monitoring and reminder systems, or working with an experienced logistics operator.

What is the difference between demurrage and detention?

Although both charges relate to the holding of a container and can occur within the same supply chain, they differ in the stage to which they apply:

Charges related to demurrage and detention are applied after exceeding the specified time for collecting or returning the container to the port. The so-called free time period is defined in the contract, and the agreed time for returning the container is crucial to avoid additional fees. Throughout the entire logistics process, it is important to monitor deadlines to avoid charges related to holding the container. Both demurrage and detention are usually used as a motivational tool by the shipping line – the goal is to ensure containers rotate as quickly as possible and do not block infrastructure.

Storage – what is this charge?

Storage is a fee charged by the port terminal for storing a container on its premises, covering the use of the terminal’s space by the container. Storage charges apply to both exporters and importers and are calculated based on the area occupied by the container, regardless of demurrage charges. Unlike demurrage, storage is not charged by the shipping line but by the terminal operator.

A storage charge may occur, for example, when the container has already been released by the shipping line, but the consignee has not arranged inland transport in time.

Storage is often charged alongside demurrage, although it appears as a separate item on the invoice. In some ports, storage may also apply to loose cargo, not just containers.

Container storage – which containers does the storage fee apply to?

Storage applies to all types of containers, but the highest storage rates are charged for refrigerated containers, which require special storage conditions, connection to a power supply, and constant temperature monitoring. Different storage rates apply depending on the type of container, and charges related to the use of terminal space are particularly high for refrigerated containers that are monitored and powered.

It is important to control dwell time, as minimising storage costs is crucial. In addition to refrigerated containers, storage also applies to:

• 20’ and 40’ containers
• Reefer (refrigerated) containers
• Specialised containers (e.g., tanks, open top)
• Empty containers awaiting loading or collection

Storage charges also apply to empty containers. They are imposed if the container is delivered to the terminal too early before the planned shipment, or if it is not collected by the carrier on time.

Which containers are subject to storage charges?

Storage applies to all types of containers, but the highest storage rates are charged for refrigerated containers, which require special storage conditions, connection to a power supply, and constant temperature monitoring. Different storage rates apply depending on the type of container, and charges related to the use of terminal space are particularly high for refrigerated containers that are monitored and powered.

It is important to control dwell time, as minimising storage costs is crucial. In addition to refrigerated containers, storage also applies to:

• 20’ and 40’ containers
• Reefer (refrigerated) containers
• Specialised containers (e.g., tanks, open top)
• Empty containers awaiting loading or collection

Storage charges also apply to empty containers. They are imposed if the container is delivered to the terminal too early before the planned shipment, or if it is not collected by the carrier on time.