What is Demurrage?
Demurrage, in container shipping, is the charge for containers or cargo that remain in the terminal beyond the allowed free time, typically import containers not picked up after discharge and, in some tariffs, export containers delivered early. The US Federal Maritime Commission defines demurrage and detention together as charges, including per diem, assessed by ocean carriers, marine terminal operators or NVOCCs for the use of marine terminal space or shipping containers, excluding freight (46 CFR 541.3). Free time and daily rates, usually rising in tiers, are set in carrier tariffs, terminal schedules or service contracts, and some carriers merge demurrage and detention into one combined free time. In chartering the term means something different: BIMCO's Laytime Definitions for Charter Parties 2013 define demurrage as an agreed amount payable to the owner for delay to the vessel after laytime has expired. Under the FMC's interpretive rule (46 CFR 545.5), such charges are reasonable only when they serve as incentives to move cargo.
Why it matters for forwarders
Demurrage builds fastest when something blocks pickup: customs holds, unpaid freight, a missing delivery order, scarce terminal appointments or chassis shortages. In US trades, the FMC billing rule in effect since 28 May 2024 requires invoices within 30 calendar days of the date charges were last incurred and sets mandatory invoice content, including free time, availability date and the tariff or contract basis; invoices that miss the deadline or omit required information need not be paid. Billed parties must have at least 30 days to request mitigation, refund or waiver, and the billing party must try to resolve the request within 30 days. In 2025 the D.C. Circuit vacated 46 CFR 541.4, which restricted who could be billed, while the rest of the rule remains in force. Track availability and last free day per container, push for releases before arrival and check every invoice against these requirements.