In one sentence
Demurrage is a charge levied by the shipping line when a container stays at the port (inside the terminal) longer than the agreed free time after vessel arrival. It is a daily penalty designed to discourage containers from sitting around in already-congested terminals.
If your container lands at Felixstowe on Monday and you're given 5 days free time, but you don't collect it until Tuesday the following week — that's 2 days of demurrage. At Felixstowe rates, that can be £150–£400 of unexpected cost on a single 40ft container. On a stuck shipment (customs hold, missing paperwork) demurrage routinely hits four figures.
Demurrage vs Detention — the key difference
Where: Container at the port terminal.
Charged by: Shipping line (the terminal charges the line, the line passes it on).
Clock starts: Day after vessel discharge (some lines: day of discharge).
Clock stops: When the container exits the terminal gate.
Why it's charged: Your container is occupying valuable yard space.
Where: Container off-port — at your premises or a depot.
Charged by: Shipping line.
Clock starts: When the container leaves the terminal.
Clock stops: When the empty container is returned to the line's nominated depot.
Why it's charged: The line's container asset isn't earning anywhere else.
Some lines combine the two into a "combined demurrage and detention" tariff (sometimes called "merged" or "all-in" free time) — particularly common on UK import lanes. In that case there is one pool of free time covering both port and off-port time, and a single daily charge applies once you blow through it.
How free time works
Every shipping line publishes a free time tariff for each port. Free time is the number of calendar days you have before demurrage starts to accrue. Standard UK import free time on the major lanes typically looks like this:
| Container type | Typical free time (UK import) | Indicative day-rate after free time |
|---|---|---|
| 20ft / 40ft Dry | 5–7 days demurrage | £60–£90/day (then escalates) |
| 40ft High Cube | 5–7 days demurrage | £70–£100/day |
| Reefer (refrigerated) | 3–5 days demurrage | £100–£250/day (much higher) |
| Open Top / Flat Rack | 5–7 days demurrage | £80–£120/day |
| Combined free time | 10–14 days (port + off-port) | £60–£100/day combined |
How to calculate demurrage — worked example
The basic formula is straightforward:
Demurrage = Σ (days in each tier × rate for that tier)
The tricky part is the tiered structure. Here's a real-world example using a typical UK shipping-line tariff:
| Tier | Days | Rate per 40ft/day |
|---|---|---|
| Free time | Days 1–5 | £0 |
| Tier 1 | Days 6–10 | £75 |
| Tier 2 | Days 11–17 | £140 |
| Tier 3 | Days 18+ | £260 |
Scenario: Your 40ft container lands on Monday and is collected on day 14 (because of a customs hold). What's the demurrage?
- Days 1–5: £0 (free time)
- Days 6–10 (5 days × £75): £375
- Days 11–14 (4 days × £140): £560
- Total demurrage: £935
If the same container had stayed until day 21, you'd add 7 more days at £140 (£980) plus 4 days at £260 (£1,040) — turning a £935 problem into a £2,955 one. Demurrage compounds fast.
Quick demurrage estimator
⚓ Demurrage Estimator
Rough estimate based on a typical UK 40ft tariff. Always use your line's actual tariff for billing.
Why demurrage happens (and how to avoid it)
In my experience, almost all demurrage on UK imports falls into five buckets:
- Customs documentation incomplete or wrong. Missing certificate of origin, wrong commodity code, no EORI on the entry — clearance can't proceed, container sits, demurrage clock runs.
- No haulier booked for collection. Hauliers need 24–48 hours' notice in the current UK market. Booking on the day of arrival is too late.
- Customs hold (Orange or Red route). If HMRC calls the container for examination, you'll lose 2–5 days minimum to the inspection schedule. This is the most common cause of large demurrage bills.
- VAT or duty not paid. Goods can't be released without payment (or PVA in place). PVA registration is free and prevents this entirely for VAT.
- Cargo not ready to receive at warehouse. Even when the container is cleared, if your warehouse is full or closed, the container can't be unloaded — and the demurrage continues.
What to do before the vessel arrives
- Have commercial invoice, packing list, and any required certificates with your customs broker at least 5 working days before vessel arrival
- Confirm EORI number, deferment account or PVA, and commodity code on the customs entry
- Pre-book your haulier for the expected collection day — adjust if vessel runs late
- Ask your forwarder for the "last free day" date in writing — this is the date demurrage will start. Put it in your calendar.
- For perishables or reefer: check the line's specific reefer free time — it's usually much shorter
Disputing a demurrage invoice
Demurrage invoices arrive weeks after the event, often as a separate "supplementary" charge from the line. Before paying, check:
- The vessel discharge date on the line's tracking — that's day zero, not the ETA from the original booking
- The actual gate-out date — when the container physically left the terminal
- The tier rates match the tariff that was current at the time of import
- Whether weekends/bank holidays are included or excluded (line-specific — read the small print)
- Whether any "force majeure" or "operational" exclusions apply (e.g. terminal closure, strikes)
Genuine errors in demurrage invoicing are common — particularly around the discharge date and the tier transitions. A polite, evidence-backed dispute through your forwarder will often produce a credit. The lines have dedicated demurrage dispute teams.
Related terms
- Detention — the off-port equivalent of demurrage
- THC (Terminal Handling Charge) — the related per-container terminal cost
- UK customs procedures — most demurrage starts with a customs delay
- Freight forwarders — your first line of defence against demurrage