Detention vs Demurrage: What They Mean and How to Avoid Charges
If you import cargo through Singapore, you have likely seen both “demurrage” and “detention” appear on an invoice and wondered what the difference between them actually is. Both are late fees charged when a container exceeds its allotted free time, but they apply at separate stages of the container’s journey and for different reasons.
What is Demurrage?
Demurrage is a late fee charged by the carrier when an import container remains inside the port terminal beyond the agreed free time. The clock starts from the point the container is offloaded from the vessel and placed in the terminal yard. It stops when the container is picked up and gated out for inland delivery.
The charge exists for a straightforward operational reason: port terminals have limited yard space. When importers delay pickup, loaded containers occupy space that needs to turn over for incoming shipments. By encouraging importers to collect cargo as soon as it is available, demurrage helps discourage port congestion and incentivises prompt collection once cargo is available for release.
What is Detention?
Detention is a late return fee charged when a container has been taken out of the terminal, typically to a warehouse for unpacking, but isn’t returned empty to the agreed depot within the allotted time.
Since an empty container sitting at a warehouse can’t be loaded for the next shipment, detention charges encourage importers to return the equipment promptly, keeping the broader container pool in circulation.
Detention vs Demurrage: Key Differences at a Glance
The easiest way to tell detention and demurrage apart is by where the container is and when each charge begins.
| Demurrage | Detention | |
|---|---|---|
| Container status | Full, awaiting pickup | Empty, awaiting return |
| Location | Inside the port terminal/container yard | Outside the port, e.g. at a warehouse |
| Starts when | Container is offloaded from the vessel | Container is picked up (gated out) full |
What Causes Demurrage and Detention Charges?
Both charges stem from the same root problem: a container not moving within its allotted free time. The specific causes, however, differ depending on which side of the terminal gate the container is on.
Causes of Demurrage (Inside the Port)
The following issues often prevent containers from being collected on time.
- Customs and Inspection Delays: A shipment flagged for physical inspection or held up by incomplete paperwork can’t be released, even if trucking is standing by.
- Late Trucking Arrangements: If a truck isn’t booked until the container has already arrived, the free time clock is running before pickup is even scheduled.
Causes of Detention (Outside the Port)
These are the most common reasons empty containers aren’t returned on time.
- Slow Unloading at Warehouses: A container can’t go back empty until it’s unpacked, so a backlog at the warehouse can lead to detention charges.
- Trucking Capacity Shortages: Limited trucking capacity can delay the return of empty containers to the depot.
- Lack of Coordination between suppliers, truckers and warehousing teams: When suppliers, truckers, and warehousing teams aren’t working to the same timeline, empty containers are often delayed.
How to Avoid Demurrage and Detention Charges
Demurrage and detention charges are preventable with the right processes in place before the container even arrives.
- Handle Customs Documentation in Advance: Have permits, certificates and declarations ready before arrival so clearance isn’t the bottleneck.
- Book Inland Trucking Early: Reserve pickup well within the free time window instead of scrambling once the container has landed.
- Coordinate Warehouse Unloading Schedules: Line up unloading in advance so empty containers can be returned promptly instead of sitting in a yard.
- Use Real-Time Tracking: Monitor container status and free-time deadlines in real time, rather than finding out about a deadline after it’s passed.
This is where working with the right 3PL partner, such as SH Ground Services, makes a difference. Our customs clearance expertise and dedicated account managers help manage shipping documentation efficiently, reducing the risk of clearance delays.
Backed by a fleet of 10- to 24-ft trucks, we provide prompt container transportation to keep your shipments moving. Our transport tracking system also gives you real-time visibility into your shipment’s status, allowing potential issues to be identified and addressed early.
Minimise Container Delays with SH Ground Services
As a logistics service provider, SH Ground Services brings these services together under one roof, helping streamline cargo movement and reduce delays between each stage of the logistics process. For time-sensitive shipments, our air cargo services also offer an alternative to avoid the port-related delays associated with container freight.
Contact SH Ground Services to discuss your shipment requirements and find the right logistics solution for your business.