If you move freight through ports, rail ramps, distribution centers, and manufacturing plants, you’ve felt it: accessorial charges that show up after the shipment is “done,” but still hit your P&L.
Two of the most common (and most misunderstood) are demurrage and detention.
They sound similar because they’re both time-based penalties tied to equipment usage. But they apply at different points in the container lifecycle, are billed by different parties under different rule sets, and require different operational fixes. Getting the definitions right is table stakes. Reducing them sustainably requires something harder: tight execution at the yard and gate, backed by reliable timestamps and event visibility.
Below is a precise, operations-first breakdown, aligned to how ocean and intermodal stakeholders actually assess charges, plus the yard-level playbook to prevent them, including where a modern yard execution layer like Terminal Yard Operating System™ (YOS) fits naturally.
Why demurrage and detention exist (and why they’re rising)
At a policy level, demurrage and detention are intended to increase equipment velocity and discourage containers from being used as low-cost storage. In the U.S., the Federal Maritime Commission (FMC) has repeatedly emphasized that these fees should have an incentive function, not be imposed in ways that are unreasonable or disconnected from shipper behavior. That framing matters because it influences how carriers and terminals structure tariffs, dispute processes, and “free time” rules.
At an operations level, the story is simpler:
Chassis, containers, and slots are finite.
Network variability (labor, congestion, appointment systems, inland dwell) makes cycle times less predictable.
The yard is often the least digitized node between TMS/WMS planning and real-world execution, so “time” gets lost between systems.
When yards operate as a data blind spot, you see the same symptoms repeatedly: missed appointments, unverified arrivals, uncertain container location, long driver turn times, and delayed gate-out. Those are exactly the conditions that inflate detention and demurrage.
Definitions that hold up in audits: detention vs demurrage
Demurrage (think: at the terminal, before you pick up)
Demurrage is typically charged when an import container remains at the marine terminal or rail terminal beyond the allowed free time after it’s available for pickup (availability is often tied to discharge, last free day rules, and holds).
In plain operations terms:
Demurrage = you didn’t pick it up fast enough from the terminal.
Common triggers:
Port congestion and appointment scarcity
Customs holds, exams, or other release delays
Misaligned drayage dispatch
Lack of visibility to availability events, holds, and last free day
Who bills it:
Usually the ocean carrier (sometimes the terminal operator depending on the arrangement and tariff)
Where it accrues:
At the port/terminal/rail ramp, not at your facility
Detention (think: outside the terminal, after you pick up)
Detention is typically charged when a container (and sometimes chassis, depending on terms) is kept outside the terminal beyond the allowed free time. It starts after gate-out and ends at empty return / gate-in, subject to the carrier’s equipment interchange rules and the specific contract/tariff.
In operations terms:
Detention = you held the equipment too long once it left the terminal.
Common triggers:
Slow unloading due to dock congestion
Yard congestion and long internal dwell
Missed return appointments
Uncertainty about whether a container is empty, where it is, and when it can depart
Lack of clean, defensible timestamps for arrival, drop, hook, and exit
Who bills it:
Usually the ocean carrier (for container detention)
Chassis providers can apply separate chassis-related charges depending on the interchange model
Where it accrues:
At your facility/yard (and in transit) after pickup, until return
The key timeline (import container): where demurrage ends and detention begins
A simplified sequence helps clarify responsibility:
Vessel discharge at port
Container available (subject to holds and terminal processing)
Free time clock runs at terminal
If not picked up by last free day: Demurrage accrues
Gate-out from terminal (dray picks up)
Container arrives at consignee yard/DC
Free time clock runs while equipment is outside terminal
If not returned by last free day: Detention accrues
Empty return / gate-in at designated location ends detention
What’s important is not the textbook definition, but the operational implication:
Demurrage is mostly an availability + pickup problem.
Detention is mostly an execution + unload + return problem.
Both become expensive when status events and timestamps are unreliable.
Free time is not universal. It’s tariff- and context-specific.
A frequent mistake is assuming “free time” is standardized. It isn’t.
Free time policies vary by:
Carrier tariff or service contract
Port/terminal rules
Commodity and customer programs
Container type (dry vs reefer)
Inland point and return location constraints
Weekends/holidays treatment
Holds (customs, exams, line holds) and how they affect the clock
The FMC has published guidance and rulemaking materials around demurrage and detention practices, including expectations that charges should be tied to the ability to retrieve/return equipment. Regardless of where you land on policy, the practical takeaway for operators is consistent:
If you cannot prove when the container was actually available, when you attempted pickup/return, and when you physically gated in/out, you will lose leverage in disputes and you’ll pay avoidable fees.
For a detailed understanding of these costs, it's beneficial to explore the differences between detention and demurrage, as well as the factors influencing these charges such as terminal operations or specific YMS software, which can significantly impact efficiency in managing these timelines.
The yard-specific reason detention persists: the execution layer is missing
Most enterprises have invested heavily in:
TMS for planning and freight execution over the road
WMS for inventory, labor, and dock workflows inside the building
But the yard often remains the space between them where:
Trailer/container location is tracked manually
Spotter moves are dispatched by radio
Gate events are recorded inconsistently
Arrival and departure timestamps are partial or delayed
Exceptions are handled by tribal knowledge
That is the “yard digitization gap” in real terms. And it maps directly to detention.
Detention is fundamentally about equipment cycle time outside the terminal. Your yard controls a large share of that cycle time through:
Gate throughput and check-in accuracy
Yard visibility and asset findability
Dock door assignment and scheduling discipline
Spotter task orchestration
Empty confirmation and return readiness
If those are managed manually, you will leak time. Time becomes detention.
High-resolution cost drivers: what actually causes fees at capable operations
For teams that already run appointment systems and have baseline process maturity, the biggest drivers are usually not “lack of effort.” They are micro-frictions that add up:
Detention drivers at the facility/yard
These challenges contribute significantly to detention charges in logistics, which can be minimized with strategic interventions:
Unknown container location (search time turns into hours, not minutes)
Drop-and-hook ambiguity (who has it, where it was dropped, when it moved)
Yard congestion that prevents efficient staging for unload
Spotter bottlenecks with no prioritized queue or rules-based move logic
Gate congestion causing late departures and missed return appointments
Inaccurate timestamps that shorten “defensible” free time in disputes
Exception-heavy security steps for high-value loads handled inconsistently
Demurrage drivers upstream at terminal
No reliable “available” signal integrated into planning
Holds not surfaced early (customs, exams, carrier release)
Appointment scarcity not managed as a capacity problem
Mismatch between dray dispatch and terminal window
Even when demurrage happens upstream, the yard still matters because it affects:
How quickly you can turn empties
How quickly you can position equipment for export loads
Whether you can avoid compounding dwell across cycles
How to reduce demurrage (without pretending you control the port)
You often cannot “operate” the marine terminal, but you can reduce demurrage exposure by tightening four capabilities:
Earlier, cleaner visibility to availability and holds
Tie carrier release, terminal availability, customs status, and appointment availability to a single operational view.
Appointment strategy as capacity management
Treat terminal appointments like dock appointments: scarce slots that require prioritization rules, not ad hoc booking.
Dray dispatch aligned to last free day
Many demurrage bills come from pickups scheduled based on best intentions instead of hard last free day math.
Evidence quality for disputes
Even highly capable teams lose disputes due to missing event history. You need accurate timestamps and documented attempts.
Demurrage reduction is primarily an upstream coordination and documentation problem. Detention reduction is where your yard execution can deliver the most direct ROI.
How to reduce detention: focus on cycle time, not “working harder”
The detention playbook that consistently works is built around compressing the time between gate-in and ready-to-return.
1) Make gate events accurate, fast, and automatic where possible
If your check-in process relies on manual entry, you will create timestamp gaps and mis-identification risk (container number, chassis, carrier, seal).
A modern yard execution approach uses computer vision and workflow automation to:
Capture equipment identity accurately
Timestamp arrivals/departures consistently
Reduce gate friction and driver dwell
This matters because detention is a billing clock. If you cannot prove when an asset arrived, where it went, and when it exited, you will pay for your own data quality problems.
2) Cut “asset search time” to near zero
In many yards, the hidden tax is not unloading time. It’s the time spent finding what you already own or control.
Asset visibility needs to be operational, not just a spreadsheet:
What is on-site?
Where is it parked now?
What is its status (loaded/empty/hold/priority)?
What move is required next, and who owns the next action?
Terminal’s Advanced Yard capabilities are designed for this layer of execution, using AI vision and real-time data infrastructure to reduce search and verification work that otherwise drags out equipment turns.
3) Orchestrate spotter moves with rules, not radio
Radio-based tasking creates two problems:
No objective queue or SLA discipline
No structured data trail of when moves were requested, started, completed
A yard that orchestrates moves through a system can:
Prioritize by detention risk (last free day, return appointment time)
Stage empties and returns intentionally
Reduce rehandles by parking logic tied to load attributes
Terminal Yard Operating System™ (YOS) is built to function as the end-to-end yard execution platform, bridging the highway-to-warehouse bottleneck with workflows that connect gate, yard, and dock operations into one operational truth.
4) Make “empty ready” a first-class status, not a guess
Detention often persists because “empty” is not a reliable state. It is a conversation. The result is missed returns, late bookings, and wasted spotter cycles.
A stronger model:
Define “empty ready” criteria (unloaded, inspected if needed, paperwork complete, return location known)
Timestamp the moment the container becomes return-eligible
Trigger return workflows immediately
When this is systematic, your return cadence becomes predictable, and detention drops.
5) Use defensible timestamps to prevent losing disputes by default
Even when you did everything right operationally, you may still face invoices that require dispute. Disputes succeed when you can produce:
Gate-in/out times at your facility
Evidence of appointment unavailability or terminal constraints
Proof of holds and release timing
Attempt logs and event history
A yard that remains a “data black hole” can’t do that. A yard that is digitized can.
Terminal’s approach, including Terminal-in-a-Camera™ deployments and enterprise-grade event capture, is designed to create that audit trail without adding extra manual work on the yard team.
Practical example: the same container, two outcomes
Scenario: Import container picked up Monday. Free time for detention expires Thursday end-of-day.
Outcome A (manual yard)
Monday: container arrives, manually logged, parked “somewhere near row D”
Tuesday: dock is busy, container not located quickly; spotter is assigned late
Wednesday: unloaded, but “empty” not confirmed until afternoon; return not booked
Thursday: return appointment missed due to late departure from gate
Result: detention charges accrue, and disputes are weak due to fuzzy timestamps
Outcome B (digitized yard execution)
Monday: automated gate capture logs container/chassis ID and timestamps arrival
System assigns a preferred parking location based on attributes and downstream door plan
Spotter moves are queued and prioritized against last free day and return windows
Empty-ready status is captured immediately; return workflow triggers same day
Thursday: container returns within free time
Result: detention avoided, or defensible evidence exists if exceptions occur
The difference is not effort. It’s the presence of an execution system in the yard that compresses cycle time and removes ambiguity.
Where Terminal fits (without ripping out your TMS/WMS)
Most logistics leaders are already driving initiatives around customer experience, automation, resilience, sustainability, and applied AI. The yard is a high-leverage place to do that because it sits between planning systems and physical execution.
Terminal Yard Operating System™ (YOS) is designed to bridge that gap as an end-to-end yard execution platform:
AI-native visibility using proprietary computer vision, which significantly enhances accuracy
Real-time yard data infrastructure that creates a reliable operational record
Workflow automation across pre-arrival planning, check-in/check-out, movement orchestration, and advanced yard/security use cases - a process that saves more time
Network scalability for operators running multi-yard footprints across North America
In detention vs demurrage terms, the most direct impact is typically on detention, because that is where facility-level execution controls cycle time. But improved event accuracy from our AI-native visibility and better coordination can also help teams reduce demurrage exposure by tightening pickup planning and documentation.
Moreover, our cloud-based yard management software solutions offer superior scalability compared to traditional on-premise systems. This flexibility allows for seamless integration with existing TMS/WMS without major disruptions.
The takeaway: demurrage is upstream time; detention is your yard time
If you want a clean mental model:
Demurrage is what you pay when the container sits at the terminal beyond free time.
Detention is what you pay when the container sits with you (or in your network) beyond free time.
Both are time-based. Both are preventable in many cases. And both get worse when the yard lacks system-of-record visibility.
As freight volumes and facility footprints grow while labor availability stays tight, the winning strategy is not asking yards to do more with less through heroics. It’s giving them a modern execution layer that turns the yard from a data black hole into a predictable, auditable, high-throughput node.
That’s the problem Terminal was built to solve, and it’s why yard digitization is increasingly one of the fastest paths to measurable reductions in detention, improved throughput, and a calmer day at the gate.
FAQs (Frequently Asked Questions)
What are demurrage and detention charges in freight shipping?
Demurrage and detention are time-based penalties in freight shipping that discourage prolonged use of containers and equipment. Demurrage applies when an import container stays at the marine or rail terminal beyond the allowed free time before pickup, while detention applies when the container is kept outside the terminal beyond the allowed free time after pickup.
Why do demurrage and detention charges exist and why are they increasing?
These charges exist to increase equipment velocity and prevent containers from being used as low-cost storage. They are rising due to finite chassis, containers, and slots; network variability like labor issues and congestion; and poor digitization at yards leading to missed appointments, uncertain container locations, and delays that inflate these fees.
How do demurrage and detention differ operationally?
Demurrage is primarily an availability and pickup issue occurring at the terminal before you pick up the container. Detention is an execution, unload, and return issue occurring after the container has left the terminal until it is returned or gate-in. Each requires different operational fixes focused on yard execution, timestamps, and event visibility.
Who typically bills demurrage and detention charges?
Demurrage charges are usually billed by the ocean carrier or sometimes the terminal operator depending on arrangements. Detention charges are typically billed by the ocean carrier for container detention, while chassis-related detention fees may be billed separately by chassis providers based on interchange models.
What factors can trigger demurrage or detention fees?
Demurrage triggers include port congestion, customs holds or exams, misaligned drayage dispatch, and lack of visibility into container availability. Detention triggers include slow unloading due to dock congestion, yard congestion causing long dwell times, missed return appointments, uncertainty about container status or location, and lack of clean timestamps for key events.
Is free time standardized across all carriers and terminals?
No, free time is not universal. It varies depending on carrier tariffs or service contracts, port/terminal rules, commodity types, customer programs, and container types such as dry versus reefer containers. Understanding specific free time policies is crucial to managing demurrage and detention effectively.
