Demurrage is a fee that must be paid by the consignee or shipper due to late return of containers that remain at the port past the allotted free time. This cost arises because the shipping line incurs losses when containers are held longer than scheduled.
In the export-import business, container usage comes with a predetermined free period. If that time is exceeded, the container user will be fined based on the shipping line’s policy. Therefore, it's essential to understand how demurrage works to avoid unnecessary additional costs.
Demurrage Time Frame at Ports
Each shipping company has its own policy regarding the allowed usage period for containers at port. Typically, 7 to 10 free days are given from the vessel’s arrival for loading/unloading. If the container isn’t returned empty within this time, demurrage charges will begin to apply.
In some cases, shipping lines may offer longer grace periods—up to 21 days—especially when cargo requires additional documentation or special inspections before unloading.
Causes of Demurrage Fees
Common causes include:
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Slow administration – Customs clearance delays can hinder container release.
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Port congestion – A spike in cargo traffic may cause loading/unloading delays.
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Inland transport delays – Issues in trucking to/from port extend container usage time.
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Contractual issues – Schedule changes or miscommunication with shipping lines.
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Bad weather – Extreme conditions can slow port operations.
How to Avoid Demurrage Fees
✅ Improve Logistics Management
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Use real-time tracking systems for cargo movements.
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Streamline bureaucracy to expedite document handling.
✅ Sign Clear & Favorable Contracts
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Ensure the agreement includes adequate free time.
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Negotiate penalty clauses in case of unavoidable delays.
✅ Optimize Standard Operating Procedures (SOP)
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Align all supply chain actors on efficient workflows.
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Use weather forecasts to better schedule unloading.
✅ Prepare Timely Inland Transport
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Ensure trucks are ready to move containers as soon as they arrive.
Demurrage Is Critical in Logistics Management
Demurrage is a crucial element in export-import logistics. With proper planning, efficient management, and strong understanding of port and shipping policies, businesses can reduce these costs. Managing shipments smartly will help avoid unnecessary charges and ensure smooth operations.
LATEST UPDATE: Free Demurrage During Eid 2025
To support smooth cargo distribution during Eid al-Fitr 2025, all shipping lines will offer free demurrage tolerance during the holiday period.
Take advantage of this policy to ensure uninterrupted logistics operations. PT Transcon Indonesia is ready to support your shipping activities during the festive break!
Get Your Container Needs from Transcon Indonesia
In today's dynamic international trade landscape, efficient container management is key to minimizing logistics costs. Transcon Indonesia offers a variety of 20- and 40-foot container types and dimensions tailored to your shipping needs.
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