Do You Know Container Free Time: Free Demurrage & Free Detention?

What are Free Detention and Free Demurrage for Containers?

When shipments involve large container volumes or destinations far from the discharge port, customers often apply for sufficient free detention and free demurrage at the time of booking. Many people find free detention easier to obtain while free demurrage is relatively hard to secure. Let’s clarify their differences.

Demurrage: It refers to the container overdue charges while the container remains under the carrier or its agent’s control. Normally it is incurred at the destination terminal or container yard before the consignee completes customs clearance and picks up the cargo.

Detention: It refers to container overdue charges when the container is in the consignee’s possession. Such charges arise after the consignee clears customs, picks the full container out of the yard, and fails to return the empty container within the allowed period.

Both Free Demurrage and Free Detention are types of container overdue fees. The differences are as follows:

• Free Demurrage: Calculated from the moment the full container is discharged onto the terminal until the container is picked out of the port.

• Free Detention: Calculated from the moment the container leaves the terminal until the empty container is returned to the port.

There is also Free Storage: free storage period offered by the terminal. It starts when the container is discharged at the terminal and ends when the container is picked up.

Free Demurrage and Free Detention are container overdue fees collected by shipping lines. Normally the standard free period is around 7 days. For some ports with transshipment or special arrangements, 10–14 days can be applied, and 21 days may be approved in exceptional cases. Free Storage is yard storage fee charged by the terminal, generally 5–7 days, and it is usually difficult to extend.

Differences among Free Time, Free Demurrage and Free Detention

1. Free Demurrage: free period for containers staying inside the terminal after vessel arrival.

2. Free Detention: free period for containers moved out of the terminal after vessel arrival.

3. Free Storage: free stacking period for containers stored at the terminal.

Items 1 and 2 are determined by shipping lines and can be applied for with carriers. In most cases, the approved Free Time = Free Demurrage + Free Detention. The standard free time at destination ports is usually 7 days. Applications for 14 days are commonly approved, while 21 days is harder to obtain, unless the applicant is a long-term stable client or the carrier has abundant empty containers at that port. Many practitioners confuse Demurrage and Detention. Storage is the yard stacking fee charged by the terminal to shipping lines. The duration of Free Storage is set by the terminal rather than the carrier.

Demurrage and Detention DefinitionThe demurrage period is calculated from the date the full container is discharged until the date the full container is released out of port, minus the standard free time. The detention period is calculated from the date the full container leaves the port until the consignee returns the empty container to the carrier’s stack at the port.

D&D (Demurrage & Detention) means container overdue charges, and the related term is Free Time.

• Free Demurrage starts upon cargo arrival at destination.

• Free Detention starts when the consignee picks up the full container.

If the consignee fails to pick up goods after the free period expires, Demurrage will be charged per carrier’s tariff. If the consignee fails to return empty containers after the free period expires, Detention will be charged per carrier’s tariff.

Whether 7 days of free demurrage is sufficient depends on the speed of import customs clearance. Whether 7 days of free detention is enough depends on how quickly the empty container can be returned. These two are not mutually exclusive; you should apply for both at the same time!

Free Demurrage and Free Detention refer to free container time inside and outside the terminal respectively. Since containers belong to shipping lines, extensions can be requested. Both relate to container rental fees instead of space charges and are collected by carriers.

At Indian ports, buyers usually request longer Free Detention because they need to transport containers to inland destinations and require extra time for container usage. This does not mean Free Demurrage cannot be applied for in India.

What is the English term for yard storage fee? If containers are detained at the destination terminal or yard beyond the allowed time, the related charge is Storage. You may apply for "Free Storage". Sometimes Free Time = Free Storage + Free Demurrage. However, shipping lines seldom approve free storage, because storage fees must be paid to terminals. If free storage is granted, the carrier has to bear such cost.