Detention vs Demurrage vs Per Diem
Three charges, three different triggers, three different parties billing them. Here is what each one actually means.
These three terms get used interchangeably by people who should know better, including occasionally by the carriers issuing the invoices. The confusion is expensive, because you cannot dispute a charge you have not correctly identified — and the party responsible for paying differs depending on which one it actually is.
The shortest version: demurrage is charged while a container sits inside the terminal past its free time. Detention is charged once it has left the terminal and is held too long outside. Per diem is a daily charge for using the carrier's equipment beyond the agreed period.
Inside the gate, outside the gate, and the equipment itself. That distinction covers most cases — but there are real complications, particularly in trucking, where "detention" means something different again.
At a glance
The three charges compared.
| Charge | What triggers it | Where | Typically billed by |
|---|---|---|---|
| Demurrage | Container remains in the terminal past free time | Inside the terminal | Ocean carrier or terminal operator |
| Detention | Container held too long outside the terminal — or, in trucking, a driver waiting to load or unload | Outside the terminal, or at a facility | Ocean carrier, or the trucking carrier |
| Per diem | Carrier equipment used beyond the agreed period | Anywhere | Equipment owner — carrier or leasing company |
In detail
What each one actually covers.
Demurrage — inside the gate
When a container is discharged from a vessel, the terminal allows a period of free time for it to be collected. Once that expires, demurrage accrues daily until the container leaves.
The causes are often outside the cargo owner's control — customs hold, missing documentation, no available appointment slot, or terminal congestion. That is precisely why demurrage is disputed so often.
Applies to: import containers awaiting collection. Billed by the ocean carrier or terminal.
Detention — outside the gate
Once the container is out of the terminal, the clock changes. Detention accrues while you hold the carrier's container beyond the agreed period — unloading it, waiting to return it, or unable to return it because the depot will not take it.
That last case is a common and legitimate dispute. If the return location refuses the container, the delay is not yours.
Applies to: containers away from the terminal. Billed by the ocean carrier.
Per diem — the equipment itself
Per diem is a daily charge for using someone else's equipment past the agreed period. In ocean freight it overlaps heavily with detention, and some carriers use the two terms interchangeably on invoices.
In domestic intermodal it usually refers specifically to chassis or container usage. Where you see both per diem and detention on the same invoice, check carefully that you are not being billed twice for the same days.
Applies to: containers, chassis and trailers. Billed by the equipment owner.
The complication
Detention means something else in trucking.
This is where most of the confusion originates. In ocean freight, detention is about holding a container too long. In trucking, detention is what a carrier bills when a driver waits beyond the agreed free time at a shipper or receiver.
A driver arrives for a 9am appointment, the dock is not ready, and they sit for three hours. Free time is usually one to two hours depending on the contract, after which detention is billed hourly. The trailer is not the issue — the driver's time is.
Two things follow from this. First, an operation handling both ocean and road freight will see "detention" on invoices meaning two entirely different things — and the checks required to validate each are different. Second, trucking detention is frequently under-billed by carriers and under-checked by shippers, because proving the wait requires arrival and departure times that nobody captured at the time.
Worth knowing: if your operation cannot evidence gate-in and gate-out times, you can neither substantiate a detention claim you are making nor properly challenge one you have received. The record matters more than the argument.
The detail that catches people
How free time is actually counted.
The number of free days is the part everyone negotiates. How those days are counted is the part that determines the invoice — and it varies considerably.
- Calendar days versus working days. Some carriers count weekends and public holidays, others do not. Over a long weekend that difference is material.
- When the clock starts. Discharge date, availability date, or gate-out. Three different start points, three different totals.
- Whether the last day counts. Some tariffs charge the day of return, some do not.
- Port-specific variation. The same carrier can apply different free time at different terminals.
- Combined versus separate free time. Some contracts give one pool covering both demurrage and detention, others give each its own.
Two carriers quoting the same number of free days can therefore produce quite different charges on the same shipment. When checking an invoice, the tariff terms matter as much as the headline number.
Practical
How to check a charge is valid.
Before paying any of the three, five checks are worth running. Most disputed charges fail on one of them.
- Does the charge type match what actually happened — inside the terminal, outside, or equipment usage?
- Do the dates on the invoice match your own gate-in and gate-out records?
- Was free time calculated on the basis your contract specifies?
- Was the delay caused by something outside your control — customs hold, no appointment available, terminal congestion, or a depot refusing return?
- Are you being billed twice for the same days under two different charge names?
For US ocean shipments there is a further layer. The Federal Maritime Commission sets requirements covering who may be billed, the timeframe for issuing an invoice and the process for seeking mitigation or refund. A charge that does not meet those requirements is challengeable on procedural grounds regardless of whether the underlying delay occurred.
Not sure which charges you are actually paying?
Send us 100 recent invoices. We will check every accessorial — including demurrage, detention and per diem — against your agreed terms, and send you a written report in 5 business days.
Common questions
Detention, demurrage and per diem, answered.
What is the difference between detention and demurrage?
Demurrage applies while a container sits inside the terminal beyond its free time. Detention applies once the container has left the terminal and is held too long outside it. The simplest way to remember it: demurrage is inside the gate, detention is outside the gate.
What is per diem in shipping?
Per diem is a daily charge for using a carrier's equipment beyond the agreed period. In ocean freight it often overlaps with detention and some carriers use the terms interchangeably. In domestic intermodal it usually refers specifically to chassis or container usage billed by the day.
Does detention mean something different in trucking?
Yes, and this is a common source of confusion. In ocean freight, detention is about holding a container too long. In trucking, detention is what a carrier bills when a driver waits beyond the agreed free time at a shipper or receiver — usually one to two hours, then billed hourly.
How is free time counted?
It depends on the carrier and the port. Some count calendar days including weekends and holidays, others count working days only. The start point also varies — discharge date, availability date or gate-out. Two carriers quoting the same number of free days can produce materially different charges.
Can demurrage and detention charges be disputed?
Yes. For US ocean shipments the Federal Maritime Commission sets requirements covering who may be billed, timeframes for issuing invoices and the process for seeking mitigation or refund. Charges arising from terminal congestion, appointment unavailability or a carrier's own delay are frequently disputable.
Who is responsible for paying demurrage?
It depends on the incoterms and the contract of carriage. It is usually the party named on the bill of lading or their agent, but responsibility can shift depending on who caused the delay. Disputes often turn on this point rather than on the amount.
Related