Demurrage and detention: who charges what, and when the clock runs

Two charges arrive on the same late container and most importers read them as one thing. They are not one thing. They are billed by different parties, they run in different places, and the action that stops one does nothing to the other. This is how they work on cargo moving through Sohar and Salalah, written for the person who ends up paying them.

Three charges, not two

Terminal storage is what the port terminal charges for the ground a container occupies inside the gate. It is the terminal's money, on the terminal's published tariff, and it runs against the cargo whether the box belongs to the shipping line or to the shipper.

Demurrage is what the carrier charges while its own container sits inside that same terminal after the free time in the contract of carriage has run out. Same box, same yard, same days, a second and entirely separate bill from a different creditor.

Detention is what the carrier charges while its container is outside the terminal past free time. The box has gone to the consignee's premises to be unpacked and the empty has not come back yet.

So a container still in the yard on day twelve is usually generating two invoices at once, from the terminal and from the line, on two tariffs that have nothing to do with each other. An importer who settles the terminal's invoice and assumes the matter is closed finds the line's invoice afterwards, by which point the box has left the gate and the other clock has started.

Why the word demurrage means two different things

In the container trade demurrage belongs to the box. In the bulk and chartered trade it belongs to the vessel, and it means what a charterer owes the shipowner when the ship is held at berth beyond the laytime the charterparty allowed. Different contract, different party, different calculation, same word. As port agents attending vessels we draw up the statement of facts that the second kind is calculated from, and the first kind lands on the importers we clear for, so both meanings cross the same desk.

There is a second source of confusion, and it is the invoice itself. Some carriers bill the two container charges merged on one line as demurrage and detention, some call detention per diem, and North American usage swaps the words about, so what you call demurrage can be what the issuer calls detention. The difference is not a matter of wording, because each charge is stopped by a different act: the first by the full container leaving the gate, the second by the empty coming back. If your invoice does not separate them you cannot tell which clock produced the days, nor what you should have done to stop it. Ask for the breakdown by day and by location before you argue about any figure in it, and ask for the tariff it was calculated on.

Where each clock starts and where it stops

Demurrage starts when the import free time expires. The count usually runs from a fixed event in the tariff, most often discharge of the container from the vessel, and it stops when the full container physically passes out through the terminal gate. Customs release does not stop it. An entry cleared on Wednesday and a container collected after the weekend keeps accruing demurrage on every day in between, and that gap is where most avoidable money goes.

Detention starts at the same gate-out and stops when the empty container is gated back in at the depot the line nominates. Not any depot, the nominated one. Returning an empty to the wrong place can mean the clock keeps running while the box sits somewhere the line is not looking.

Terminal storage has its own free period, granted by the terminal rather than the line, starting at discharge and ending at gate-out. The two free periods are rarely the same length, which is why storage and demurrage begin billing on different dates for the same container.

Check whether your tariff counts calendar days or working days, because in Oman it matters. The Friday and Saturday weekend, Eid and the national holidays all consume a calendar count while customs and most offices are closed. Free time granted in calendar days over a holiday week is materially shorter than the same number over a working week.

What free time actually is

Free time is not a standard and it is not a right. It is granted in the contract of carriage or negotiated into a service contract, and it varies by line, by port, by trade lane, by direction and by equipment. Special equipment usually gets less of it than a dry box. Reefers, flat racks, open tops and tank containers are expensive units to leave standing, and a reefer plugged in at the terminal accrues a power charge on top of everything else.

Import and export free time are separate allowances. Export detention runs from the moment you collect an empty for stuffing until you deliver it back loaded, and shippers who plan their import clock carefully forget that one regularly.

The number is knowable before the cargo moves. Ask for the line's free time, the tier structure after it and the nominated empty return depot at the point of booking, and get it in writing on the booking confirmation rather than in conversation. This is part of what we settle when we book sea freight for a client, and it is a fair thing to ask any forwarder for.

The rate is not flat

Demurrage and detention tariffs are usually tiered. The first band after free time is charged at one rate, a later band at a higher one, and a third band higher again, per container per day. The cost of the third week is not three times the cost of the first. On a multi-container consignment the escalation is what turns an administrative delay into a serious number, sometimes one that approaches the value of the goods.

That escalation is also why a decision to leave a box sitting while a commercial dispute is settled deserves a calculation first. Storage, demurrage and detention keep accruing against whoever is liable on the bill of lading, and they do not pause because two companies are arguing. A dispute that looks worth a week of holding out often costs more than the sum in dispute, and that shows up in the arithmetic rather than in the argument.

The standard dry box tariff is also not the only tariff. Special equipment sits on its own higher tiers, a reefer adds the power charge for every day it stands, and one container held out of a larger consignment can push the whole arithmetic into a higher band if the rest wait alongside it. Say twenty boxes on one bill of lading with one of them under query. If the consignment cannot come out whole, taking out what can come out costs less than waiting for the rest.

What actually holds cargo at Sohar and Salalah

In practice the clock runs for a short list of reasons, and almost all of them are set before the vessel arrives:

• The original bill of lading has not reached the consignee and no telex release has been sent.
• Local charges are unpaid, so the delivery order has not been issued and the terminal has nothing to release against.
• A permit from an authority other than customs was applied for after the vessel sailed, and some certificates can only be issued at origin at the time of shipment.
• A classification or valuation query is open on the declaration.
• The importer's commercial registration does not cover the goods being imported.
• The consignment is selected for scanning or physical examination and waits its turn.

Most of these are documentary, which means they are fixable weeks earlier at no cost and unfixable at the terminal at high cost. The detail on each one sits in our page on customs clearance filed through Bayan.

Asking for more time, and who decides

An agent does not set a principal's tariff and cannot waive it. Where we act as liner agent for a contracted principal we apply that principal's published demurrage and detention terms and issue the delivery order under their authority. A request for extra free time goes to the principal, with the reason attached, and they decide.

What makes such a request worth sending is timing. Made before free time expires, with a concrete cause such as a container held for inspection or an original document in transit, it is a live commercial question. Made after the invoice has been raised, it is a request for a credit note, and that is a slower and less promising conversation. If you can see the delay coming, say so while the free time still exists.

What stops detention, and whose job it is

RSL covers the vessel, the cargo, the clearance and the road. The truck that lifts the box off the terminal and the movement that returns the empty to the nominated depot are both on the same file. That matters because detention does not stop at customs release, it stops when the empty is gated back in at the nominated depot, and that is a movement we make ourselves and know the date of.

We also tell you the numbers. The last day of terminal storage free time, the last day of demurrage free time, and what the tier after it costs. Those three are usually enough to get a container out on time.