Demurrage and Detention Management

Demurrage and detention charges are considered among the most common and costly issues in international shipping. These fees must be carefully managed by businesses dealing with ports and customs, such as those regulated by the Bureau of Customs, to avoid unnecessary expenses and delays. Poor management of these charges directly increases your total importation costs.

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Who Pays for Demurrage and Detention?

These charges are typically paid by the merchant, either the importer (consignee) or exporter (shipper), depending on the contract.

• Demurrage is generally paid by the cargo owner (consignee) when the full container is not picked up within the allowed time.
• Detention is generally paid by the cargo owner (consignee) when the empty container is not returned to the depot within the allowed time.

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Why Does It Happen?

• Customs Delays - Cargo is left at the port when paperwork is not completed. Incomplete import documentation is one of the most common causes.
• Port Congestion - Pick-ups are restricted due to lack of space or labor.
• Scheduling Issues - Detention occurs when trucks or warehouse space are not available for unloading.
• Poor Communication - Updates on container availability are missed.

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How to Avoid Demurrage and Detention

• Free Time Negotiation - Additional free days should be requested during contract negotiations (e.g., 14 days instead of 7).
• Pre-clearance - Documentation should be submitted early to avoid terminal bottlenecks. Understanding the customs clearance process helps you plan submission timelines accurately.
• Real-Time Monitoring - Digital tools should be used to provide alerts before free time expires.
• Pre-booked Trucking - Transport arrangements should be secured before container arrival.
• Carrier Haulage Option - Liability may be shifted when inland transport is handled by the shipping line.

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Common Strategies

• Alternative Storage - Containers may be transferred to nearby warehouses or container yards when ports are congested.
• Shipper-Owned Containers (SOC) - Carrier detention fees can be avoided when owned containers are used.
• Invoice Analysis - Invoices should always be reviewed against actual terminal activity to identify errors.

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Demurrage and detention charges can also arise when goods are flagged for inspection during customs clearance. Working with a licensed customs broker who can anticipate and manage clearance timelines is one of the most effective ways to minimize these fees.