Understanding Demurrage and Detention

Demurrage charges are imposed when import containers remain in the port beyond the allowed free days, while detention charges occur when containers are not returned to the carrier within the specified period after pickup. These charges often arise due to delays in customs clearance, port congestion, or inefficient coordination among supply chain partners. On average, shippers can pay between $75 to $150 per container per day in demurrage fees and similar amounts for detention charges, adding up to significant costs when delays extend over multiple days.

Globally, it is estimated that demurrage and detention fees can constitute up to 10% of the total freight costs for shippers. In 2020, for example, these fees were reported to be about 8-10% of the overall freight expenditure, highlighting the financial impact on businesses.

Shipper's Liability for Empty Containers

In addition to the charges directly incurred by shippers, there is a liability when consignees fail to return empty containers on time. The responsibility for returning containers typically falls on the consignee; however, shippers can still be held liable for detention charges if the containers are not returned within the stipulated time. This can lead to strained relationships with carriers and increased costs, as carriers may impose penalties for the prolonged use of their containers.

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