Detention and demurrage are two of the most commonly misunderstood charges in freight shipping. They are often confused with each other, but they apply in different contexts and are charged by different parties. Understanding the distinction — and knowing how to avoid these charges — can save your business thousands of dollars per year.
What Is Detention?
Detention is a charge assessed by a trucking carrier when their driver and equipment are held at a shipper or receiver facility beyond the allotted free time. Free time is typically 1 to 2 hours for loading or unloading. After that, detention accrues at $50 to $100 per hour, depending on the carrier and the agreement.
Detention applies to the truck and driver — it compensates the carrier for the productive time lost while their asset sits at your dock. A driver who waits 6 hours to be unloaded has lost most of a driving day, which means lost revenue for the carrier.
What Is Demurrage?
Demurrage applies to ocean containers and is charged by the steamship line (ocean carrier) when an import container sits at the port terminal beyond the allotted free time. Free time varies by port and carrier but is typically 3 to 5 days for imports. After that, demurrage charges begin — and they escalate rapidly. The first few days might cost $75 to $150 per day, but after a week, rates can jump to $200 to $400 per day or more.
Demurrage is distinct from detention because it applies to the container at the port or terminal, not the truck at your facility. The steamship line charges demurrage; the trucking carrier charges detention.
Per Diem Charges
Per diem is a third related charge that catches many shippers off guard. Once you pick up an ocean container from the port, the steamship line grants a set number of days (typically 4 to 7) to return the empty container. If you keep the container at your warehouse beyond that period — because unloading is taking longer than expected, for example — per diem charges of $100 to $300 per day begin accruing.
The key distinction: demurrage applies while the container is at the port terminal, and per diem applies after the container has left the port and is at your facility.
How These Charges Add Up
Consider a realistic scenario: an import container arrives at the Port of Long Beach. Due to a customs hold, it sits at the terminal for 8 days — 4 days beyond the free time. That is $600 to $1,200 in demurrage. Once cleared, the drayage carrier picks it up and delivers it to your warehouse, but your receiving team is backed up and takes 5 hours to unload it, adding $150 to $300 in detention. You then keep the empty container for 3 extra days before returning it, adding $300 to $900 in per diem.
A single container could easily incur $1,000 to $2,400 in combined detention, demurrage, and per diem charges — on top of the freight cost. Scale that across dozens of containers per month and the impact on your logistics budget is significant.
How to Avoid Detention Charges
- Stage freight before the truck arrives: Have pallets built, paperwork ready, and dock space cleared before the appointment time.
- Schedule accurate appointments: If your facility takes 3 hours to load, do not schedule a 1-hour appointment. Honest scheduling prevents detention.
- Staff your docks adequately: Insufficient dock workers are the most common cause of extended loading and unloading times.
- Use drop trailer programs: The carrier drops an empty trailer at your facility and picks it up later when it is loaded. The driver is not waiting, so no detention accrues.
- Communicate delays immediately: If you know loading will take longer than expected, tell the carrier. They may be able to reschedule rather than having the driver wait.
How to Avoid Demurrage Charges
- Clear customs before vessel arrival: File ISF (Importer Security Filing) on time, ensure your customs broker has all documentation, and resolve any holds before the container is discharged.
- Schedule drayage pickups within free time: Know your free time window and have your drayage carrier scheduled to pick up the container within it.
- Use pre-pull services: Move containers from the port terminal to a nearby container yard within the free time window, even if you are not ready to unload yet. Storage at a yard ($15-$30/day) is far cheaper than port demurrage.
- Monitor vessel ETAs: Track your containers and adjust your plans when vessels arrive early or late.
Detention and demurrage are largely avoidable with proper planning and coordination. Working with an experienced freight dispatch partner helps ensure your containers clear the port on time and your trucks are loaded and unloaded efficiently. Get a quote to learn how we can help you eliminate these costly charges.