When you book ocean freight you are buying carriage and borrowing a container. The borrowing has its own terms, and the charges attached to it regularly exceed the freight itself on a shipment that goes wrong.
Three charges, three meanings
- Demurrage: the container is inside the terminal beyond its free time. On an import, this is the clock from discharge until you collect it. You are being charged for occupying terminal space.
- Detention: the container is outside the terminal beyond its free time. The clock from collection until you return the empty. You are being charged for keeping the carrier's equipment.
- Per diem: the North American term, usually meaning detention, charged per container per day. Some carriers use it to mean a combined charge, so ask what is being measured.
They are frequently conflated, including by people invoicing them. When you receive a charge, establish which clock ran and between which two events, because that determines whether it is correct and who is responsible. The detention and demurrage calculator helps model the exposure before it happens.
In the United States, the Federal Maritime Commission's billing rules give you concrete grounds to challenge invoices that lack required information or that charge for days when the container could not have been returned. See the FMC rules that let you refuse to pay.
Free time, and how it disappears
Free time is negotiable and it is quoted in calendar days, not working days, unless the contract says otherwise. Weekends and public holidays consume it. So do:
- Customs examinations, which can take a week and for which the carrier is not responsible
- Terminal congestion and appointment scarcity
- Missing or incorrect documentation delaying release
- Empty return depots refusing to accept, on the grounds that they are full
That last one deserves attention. If the depot will not accept your empty, detention keeps running. Get the refusal in writing with a timestamp every time it happens. It is the only basis on which the charge is later waived.
Container damage and the interchange report
The Equipment Interchange Receipt, or EIR, is the document recording the container's condition each time responsibility passes: depot to haulier, haulier to you, back again. It is the entire evidence base for a damage dispute.
- Inspect when you receive it. Roof, floor, door seals, corner castings, and the CSC plate. Look for daylight from inside with the doors closed.
- Record damage on the EIR before signing. Signing a clean EIR for a damaged container transfers the argument to you.
- Photograph everything, with the container number visible in the frame.
- Repeat on return.
Normal wear and tear is the carrier's cost: minor dents, scratches, surface rust, faded paint. Damage is yours: holes, tears, structural distortion, damaged rails or castings, floor damage, contamination and odour. Contamination is the expensive one, because a container that has carried something odorous or spilled a chemical may need specialist cleaning or may be written off.
Damage protection plans
Most carriers offer a damage protection plan, charged per container, capping your liability for damage on return. Whether it is worth it depends on your cargo and your handling. For clean palletised goods loaded by an experienced crew, usually not. For steel, machinery, drums, anything craned in, or any operation where you do not control the loading, it often is.
Read what it excludes. Contamination, missing parts and damage from overloading are commonly outside the plan.
Practical controls
- Negotiate free time at booking, not when the invoice arrives. It is a normal commercial term, particularly on regular volumes.
- Track the clocks. Know your last free day for every container on the water.
- Clear documentation early. Most demurrage is caused by paperwork, not by logistics.
- Book empty return slots as soon as you have the container.
- Keep every EIR and photograph for at least a year.
- Consider a shipper owned container on lanes where detention is chronic. See special equipment.
