Silk Bridge Journal

Definition

Demurrage is a fee charged for keeping a container at a port or terminal after the free period granted by the shipping line, known as free time, has expired.

In practice, this means that the container has arrived at the port but has not been collected within the required timeframe. Each additional day may result in additional charges, which often increase the longer the container remains at the terminal.

Why Should Importers Know This?

 Demurrage can very quickly generate unexpected costs. Delayed customs clearance, missing required documents, problems obtaining the release of the goods, payment delays, or difficulties organizing transportation may cause a container to remain at the terminal beyond the allocated free period.

Depending on the shipping line, port, and terms of the specific shipment, the charges can be significant. Therefore, the importer should know the Last Free Day, monitor the shipment status, and arrange customs clearance and container collection well in advance.

Demurrage can often be reduced through proper documentation management and cooperation with an efficient freight forwarder and customs agent.

Related Terms

 Detention · Free Time · Last Free Day · Customs Clearance · Bill of Lading · Freight Forwarder

In Practice

Before the vessel arrives, the importer should check how many free days are available for the container under the specific shipment and determine the Last Free Day. Customs clearance and container collection should be arranged sufficiently in advance so that the container can be picked up from the terminal before the free time expires.