What is the difference between demurrage and detention?

Demurrage applies while cargo sits at the port terminal. Detention applies when the container itself (after pickup) is not returned to the carrier within the allotted time.

Can I dispute demurrage charges?

Yes. The Federal Maritime Commission (FMC) has established rules on reasonable demurrage practices, and charges caused by carrier or terminal delays may be disputable.

Logistics

What is Demurrage?

Charges incurred when cargo remains at a port or terminal beyond the allowed free time for pickup. In the context of U.S. customs and tariff recovery, understanding demurrage is essential for navigating the CAPE refund process and ensuring accurate duty assessment.

Definition

Demurrage is a charge assessed by a port terminal, ocean carrier, or railroad when a loaded container or cargo remains at the facility beyond the allotted 'free time' for pickup. Free time is typically 3-5 business days at ocean terminals. After free time expires, demurrage accrues daily — often at escalating rates ($50-150/day for the first week, $200-300/day after). Demurrage is distinct from detention, which applies to the container itself (after it has left the terminal). These charges incentivize efficient cargo flow and prevent terminal congestion.

How Demurrage Relates to Tariff Refunds

Demurrage charges are not duties and cannot be recovered through CAPE. However, customs clearance delays (often caused by CBP holds, missing documentation, or bond issues) can trigger demurrage. Importers who experience frequent clearance delays may want to review their broker's filing efficiency and compliance standing.

Example

A container arrives at the Port of Long Beach on Monday. Free time expires Friday. The importer's broker cannot complete customs clearance until the following Wednesday due to a CBP examination. The terminal charges 3 business days of demurrage at $150/day = $450.

Frequently Asked Questions

What is the difference between demurrage and detention?: Demurrage applies while cargo sits at the port terminal. Detention applies when the container itself (after pickup) is not returned to the carrier within the allotted time.
Can I dispute demurrage charges?: Yes. The Federal Maritime Commission (FMC) has established rules on reasonable demurrage practices, and charges caused by carrier or terminal delays may be disputable.

Legal References

FMC Interpretive Rule on Demurrage and Detention (2020)

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