Demurrage

Demurrage is the charge the carrier or terminal applies when a container sits at the port beyond the free time allowed. It is the port’s clock, ticking from the moment the container is discharged from the vessel to the moment it is collected by the consignee. Free time is typically 3 to 7 days. After that, charges accrue per container per day, escalating in tiers.

Typical demurrage rates and free time

Rates vary by carrier, by terminal, by season, and are subject to change. Always confirm current free time and rate schedule from the specific carrier’s tariff for the specific terminal, these numbers are typical, not authoritative.

What triggers demurrage on chemical imports

Five recurring causes:

1. Original Bill of Lading delay. Cargo arrives at port but the consignee has not received the original B/L. Customs cannot release the container without the B/L. Each day waiting is demurrage.
2. Customs hold. Customs inspect the cargo and hold it for 1 to 5+ days. For chemical cargo, customs are more likely to inspect than for general cargo. Demurrage runs during the inspection.
3. Compliance failure. TSCA certification missing, REACH registration not on file, AICIS declaration not filed. Cargo held until compliance documentation produced.
4. Importer’s freight forwarder slow to dispatch trucking. Container released by customs but the consignee’s transport has not been booked. Demurrage clocks while the container sits ready for collection.
5. Buyer financial issues. Importer cannot pay duties, demurrage, or freight forwarder invoice promptly. Container held for non-payment.

How to avoid demurrage

The discipline is at three points before the cargo arrives:

1. Pre-arrival document chain. Original B/L should arrive at the consignee 2 to 5 days before the vessel berths. Confirm the courier (DHL or FedEx) tracking before the vessel arrives. If the courier is slow, switch to telex release or arrange a Letter of Indemnity through the carrier.
2. Pre-arrival customs filing. The Importer Security Filing (ISF) for US imports must be filed at least 24 hours before vessel loading at the foreign port. The customs entry can be filed up to 5 days before vessel arrival, use this lead time. For other markets, equivalent pre-arrival filings exist.
3. Pre-arrival trucking and warehouse plan. Book the trucking from the port to the destination warehouse the day the vessel ETA is firm. Do not wait for arrival to call the trucker.

Demurrage cost example

A 20-foot container of chemicals delayed 7 days at Houston due to a B/L courier delay: 4 days free + 3 days at USD 75 = USD 225 in demurrage. The original B/L courier itself was USD 50 to USD 80. Spending an extra USD 30 on a faster courier in the first place would have saved USD 150 net. We have seen worse, a 12-day delay at Long Beach over Chinese New Year holiday timing cost USD 1,200 demurrage on a single container.

Demurrage is not detention

Demurrage applies while the container is at the port. Once the container leaves the port for the consignee’s premises, demurrage stops and detention starts. Detention is a separate clock with its own free time and rates, owed to the carrier (not the terminal) for keeping the carrier’s container off the maritime circulation longer than allowed.

Practical sourcing notes

For our shipments, the original B/L courier date is tracked alongside the vessel ETA. We schedule the courier so the original arrives at the consignee at least 3 days before the vessel berths. The 3-day buffer absorbs courier delays without entering port demurrage. For DG cargo, where customs inspection is more likely, we add an extra 2-day buffer beyond standard. Demurrage is the most preventable cost in the entire China-to-destination chain.

Related terms

Detention is the post-port equivalent. BOL timing is the most common cause of demurrage. FCL/LCL. LCL has different demurrage exposure because the cargo passes through the de-consolidation CFS.