Key Takeaways
Detention fees and demurrage charges are two of the most costly terms in logistics. They are additional fees incurred for holding containers or trailers beyond a specified period, and they compound fast. According to an interim report of the Federal Maritime Commission, demurrage and detention charges rose sharply between 2014 and 2017, with increases as high as 90% in a single year. Dock scheduling software is one of the most effective tools for eliminating the delays that trigger both.
Detention fees refer to a penalty paid for holding a trailer beyond the period specified in the agreement contract. Detention fees are paid on a per diem basis. This means you pay a specified rate for every extra hour the trailer spends beyond the pre-agreed grace period. In some instances, the rates could be tiered, meaning the charge increases the longer the trailer stays with you beyond the agreed-upon appointment time.
Demurrage charges are penalties paid for leaving a container at the port or terminal beyond the agreed free time. It applies before the container is picked up for delivery. Like detention fees, it is also paid on a per diem basis, and the rate can be incremental to discourage longer delays.
Detention and demurrage are closely related logistics fees. However, each only applies in different situations depending on the container's location. Both terms are tied to a pre-agreed grace period during which a container or trailer can be held without penalty, either in a yard or at a port.
Think of it this way: demurrage is like paying for overstaying in a parking garage, while detention is like getting fined for returning a rented trailer late.
It's important to note that demurrage charges and detention fees are not mutually exclusive. Without proper dock scheduling and management, you stand the risk of incurring both at different stages of the clearing and offloading process.
Supply chain workers are always looking to avoid detention and demurrage charges because their impact can be far-reaching.
The most obvious impact of detention and demurrage is the financial consequence. Depending on the specified per diem rate and the number of days overdue, the cost could easily run into thousands of dollars. For instance, ports in Long Beach and Los Angeles charge as much as $173 and $197, respectively, for detention and demurrage on 20' dry containers. Calculate this rate over two weeks, and the cost incurred runs into thousands. Detention fees can also be steep, with penalties ranging from $50 to $100 per hour for truckload, and are often billed in 15-minute increments.
Delays almost always go hand in hand with demurrage and detention. With delays come operational disruptions in the supply chain. Containers that sit longer than expected at the terminal or at the warehouse mean other shipments are held up. For demurrage, it means less space for new cargo to be offloaded at the port. For detention, it means carriers can't send their drivers to their next appointments and warehouses have backups in their yards.
Demurrage charges and detention fees are designed to serve as financial deterrents to ensure the productive use of shipping assets like containers and terminal space. When one party consistently incurs these charges, it can strain the working relationship. Logistics partners might become hesitant to work with clients who frequently face these issues, as idling containers can complicate their own operations and cash flow.
See How Opendock Eliminates Detention Fees
Walk through Opendock's detention management tools and see how structured scheduling prevents the dwell time that triggers costly carrier penalties.
Opendock's online scheduling portal helps prevent the delays that lead to demurrage and detention fees in several key ways.
Using Opendock, a beverage packer solved its dock congestion and high detention fees problem. Opendock's carrier-led scheduling helped the company save $36,000 annually in detention fees. The company also saved 600 scheduling labor hours annually across all facilities and had 90% of appointments self-scheduled by carriers.
A 3PL provider tackled unplanned truck arrivals, long wait times, and rising detention costs by switching to Opendock. Through carrier-led scheduling, the company saved $144,000 annually in detention fees, freed up 12,000 scheduling labor hours across all facilities, and now has 70% of appointments self-scheduled by carriers.
Ralph Moyle Inc. replaced manual scheduling for 37 dock doors with Opendock, saving significant customer service labor hours. The platform's reporting tools enhanced visibility into carrier punctuality and detention windows, improving accountability and speeding up check-ins through a clear and structured handoff process.
Detention fees and demurrage charges are large cost centers for many supply chains. With dock scheduling tools like Opendock, facilities can eliminate the coordination gaps that let these fees accumulate.
Detention fees are charged by a carrier when their trailer is held at a warehouse dock beyond the agreed free time. Demurrage charges apply when a container sits at a port or terminal past the free pickup period before delivery. Both are billed on a per diem basis and can escalate quickly without structured scheduling in place.
Port detention and demurrage can reach $173 to $197 per container per day at major US ports like Long Beach and Los Angeles. Truckload detention fees typically range from $50 to $100 per hour, often billed in 15-minute increments. Costs compound quickly across multiple incidents and facilities without proactive scheduling controls.
Dock scheduling software reduces both fees by giving carriers self-scheduling access, creating structured appointment windows, and providing warehouse teams with advance visibility into dock capacity. Facilities that adopt structured scheduling eliminate the idle time and coordination gaps that trigger detention and demurrage charges.