What is Free Time?
Free time is the period during which a shipper or consignee may use a carrier's container, or leave it at the terminal, without paying demurrage or detention. Demurrage generally applies to containers left in the terminal beyond the free days, while detention (sometimes called per diem) applies to containers kept outside the terminal beyond the allowance. Free time is set in the carrier's tariff or negotiated in a service contract or NVOCC rate arrangement, and is stated in calendar or working days, separately or combined for import and export. In the United States, the FMC's interpretive rule at 46 CFR 545.5 holds that demurrage and detention should serve as incentives to move cargo, and its 2024 billing rule at 46 CFR Part 541 requires invoices to state the free time and its start and end dates. Terminals may also apply their own storage free time separate from the carrier's.
Why it matters for forwarders
Free time is one of the most valuable and most overlooked items in a freight quote. Extended free time negotiated at contract stage is often worth more than a small rate saving when customs inspections, congestion or chassis shortages are likely. Track free time per container from discharge or gate-out, not per shipment, and alert clients before it expires. Under the FMC billing rule, a US invoice must be issued within 30 calendar days of the charges stopping, the billed party has at least 30 days to dispute, and the carrier must resolve disputes within 30 days. Keep proof of appointment unavailability, terminal closures or holds outside the client's control, because these are the basis for successful waivers.