Glossary · Trucking Operations
Demurrage.
Penalty charged by a steamship line or rail when an intermodal container is held beyond the free time at a port or terminal.
What it is
Demurrage is a penalty fee charged by a steamship line (ocean carrier) or rail carrier when a container is held at the port or terminal beyond the contractually free time. Standard free time at US container ports runs 4–7 days; demurrage rates range $75–$500 per day per container depending on the steamship line, the port, and how many days over.
In intermodal terminology, "detention" refers to the same concept applied to a container held outside the terminal — sitting at a warehouse past free time — while "demurrage" applies inside the terminal. Both stack up quickly when chassis availability slips, warehouse appointments push, or vessel schedules cascade. The Federal Maritime Commission (FMC) requires steamship lines to provide a clear demurrage/detention notice and a documented dispute process, but the burden of disputing falls on the carrier or BCO.
Why it matters for trucking finance
For drayage operators, demurrage is one of the largest non-revenue cost lines on the P&L. A container stuck 2 days over free time at $250 per day equals $500 in lost margin on a single move. Tracking free-time clocks per container is real operational work — and the absence of that tracking is one of the most common ways drayage operations quietly bleed margin month after month.
Demurrage disputes — when free time was extended because of vessel delays, weather events, or terminal congestion — can recover thousands per month, but only with documentation: vessel arrival proofs, terminal appointment logs, and chassis availability records. For non-drayage owner-operators (OTR, regional dry-van), demurrage is mostly irrelevant unless touching port operations.
Related terms
- Drayage — Short-distance trucking, typically the first or last leg of an intermodal move, hauling containers between port/rail and warehouses or consignees.
- Intermodal — Freight that travels in containers or trailers across multiple modes (truck + rail + ocean) without the freight itself being unloaded between modes.
- Detention Pay — Compensation paid to a carrier when loading or unloading takes longer than the contractually free time (typically 2 hours).
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