How Demurrage and Detention Fees Keep You One Step Behind

Demurrage and detention fees are familiar, visible, and frustrating for many supply chain managers. The problem isn’t that these charges are unknown—they’re there, in the contract, for everyone to see. But by the time charges surface, it’s usually too late to do anything about them. You end up chasing explanations, arguing over who’s responsible, and dealing with issues long after they’ve occurred. Meanwhile, your supply chain continues to move forward, throwing new challenges your way.

The reality is that demurrage and detention costs often get ahead of you, not because they’re impossible to manage, but because common problems in logistics make them hard to control. Let’s break down why this happens and where things go wrong.

Poor Carrier Data Sharing

A major industry-wide issue is that ocean container tracking data is often incomplete or delayed. Carriers aren’t always proactive or accurate about sharing timely information, leaving supply chain managers scrambling to make decisions with outdated details. This leads to missed opportunities for intervention. For example, when a container is stuck at a terminal and you don’t get notified in time, it continues sitting there, racking up demurrage fees. You might only find out there was an issue when the invoice arrives.
Carriers’ data is crucial for understanding what’s happening with containers, but the inconsistency of that data makes it hard to take action when it matters. This isn’t just a problem with one carrier; it’s an industry-wide challenge. Every player, from cargo owners to service providers, is working around this limitation, but the result is that you’re often behind in decision-making, with demurrage and detention costs piling up before you even know there’s a problem. At Cargoo, we get it. You need solutions, not stress. And fast. With strikes like this, what you do next determines whether you’ll face operational bottlenecks or go through disruption with minimal friction. Let’s talk tactics—specifically how real-time visibility and control can keep your shipments moving, even when everything else is gridlocked.

Complex and Inaccessible Contract Terms

Contracts are supposed to protect you from unexpected fees, but they’re often too complex and poorly organized to help in real-time. Demurrage and detention fees are tied directly to the contract’s free time—how long a container can stay at a terminal or with a consignee before fees start adding up. Each carrier offers different terms, which makes it hard to standardize operations. If one carrier offers five days of free time while another offers three, keeping track of these varying terms becomes a logistical headache.
It gets worse. Instead of having contract terms linked directly to each shipment, these details often sit buried in a folder or spread across different systems. This disconnect makes it hard to track when free time runs out and when detention or demurrage fees start. The lack of easily accessible information can lead to confusion and missed deadlines, especially when managing multiple contracts.

Without a standardized approach to free time or a system that tracks and flags these variations in real-time, you risk running up demurrage and detention costs while you work out what terms apply to each container.

Inaccurate Planning and Forecasting

Poor planning is another factor that contributes to inflated demurrage and detention costs. When you’re not accurately forecasting container needs, containers either sit idle at terminals, waiting at the gate or arriving too late to match the planned schedule. Anyway, it’s problematic—containers left unattended too long incur demurrage fees, while those returned late face detention charges.
This issue usually stems from inaccurate demand forecasting or shipment planning. Supply chain managers may misjudge container needs, leading to inefficiencies in container management, such as delayed pickups or late returns. Inaccurate planning leaves no room for flexibility, and once delays happen, the fees start accumulating.

Last-Minute Shipment Changes

No matter how well you plan, last-minute changes happen. Shipments get delayed, routes are altered, and customs can hold things up. These disruptions create situations where containers spend more time waiting—either at a terminal or while being unloaded. Every minute of delay is a potential demurrage or detention cost.
The difficulty here is that many of these changes are out of your control. You can’t predict customs delays, and route changes are often dictated by external factors. However, these last-minute disruptions lead to containers sitting idle or taking longer to return to the terminal, racking up fees.

Communication Gaps Between Stakeholders

Supply chain visibility is a team effort, and when one party drops the ball, the whole process suffers. Communication between carriers, freight forwarders, and cargo owners is often disjointed. This lack of coordination can result in containers not being picked up or returned on time, leading to unnecessary demurrage and detention costs.
For example, if a forwarder is waiting on clearance from a consignee but doesn’t inform the carrier in time, the container might sit at the port longer than planned, incurring demurrage fees. These gaps in communication not only add to your costs but also complicate efforts to get things back on track.

Empty Container Return Issues

Returning empty containers seems straightforward, but it’s a delicate clockwork process. Empty container return is one of the most critical milestones in managing demurrage and detention. The difficulty lies in coordinating return schedules, trucking availability, and ensuring the terminal is ready to receive the container. These complexities make it easy to miss deadlines, leading to significant detention fees.
Containers don’t always go straight back to the terminal after delivery. They’re repurposed or repositioned in transit, which complicates the process. If the container isn’t returned within the agreed time, detention fees start to accumulate.

Terminal congestion, customs details and documentation issues can also get in the way of returning containers even when they’re ready. This creates bottlenecks and leaves you stuck paying for delays you can’t quite avoid.

What Can You Do to Manage Demurrage and Detention Fees Better?

Demurrage and detention charges are not fully avoidable, but they can be managed more effectively with the right approach. Here’s how supply chain managers can better prepare and reduce the risk of unexpected fees:

Lift the Lid on Your Contracts

Understanding your contracts is critical. You need a system that ties your contract terms directly to the shipments booked under those contracts. This gives you contextual visibility—the ability to see relevant contract details when and where you need them. With this visibility, you can better track free time, avoid surprises, and take timely action when shipments are nearing their contract limits.

Get Help with Exception Management

If you’re investing in demurrage and detention software, make sure it offers exception management. This functionality can give you a heads up when charges are accumulating, or when your shipment is at risk of incurring demurrage or detention fees. While you won’t be able to avoid additional charges entirely, a good exception management system ensures you’re not blindsided by charges after the fact. The earlier you know, the more time you have to act.

Communicate with Stakeholders

Coordination is key. Make sure you understand the weak points in your supply chain and communicate your expectations clearly with all stakeholders. This includes setting clear SLAs (Service Level Agreements) and ensuring all partners—from trucking companies to terminal operators—are aligned. Strong communication reduces delays and bottlenecks that often lead to fees. If you’re unsure where your communication gaps are, seek expert advice on how to streamline your processes.

Monitor Container Returns

One common source of detention charges is inefficiency in how containers are managed, especially when they aren’t returned on time. Get tools that help you monitor your return schedules closely and anticipate delays in trucking or terminal operations. By maximizing container utilization and planning returns carefully, you can cut down on unnecessary detention costs.

Build a Proactive Problem-Solving Culture

Lastly, equip your team with a proactive mindset. Waiting for problems to escalate only results in higher fees. Encourage a culture where issues are addressed before they snowball. This means planning ahead for potential disruptions, aligning with partners regularly, and staying alert to any changes that could impact the movement of your shipments. Proactive management is the best way to prevent demurrage and detention costs from getting out of control.

Demurrage and Detention   Demurrage and detention costs are unavoidable but paying more than necessary is not.   Take control of your shipments and cut unnecessary costs with Cargoo.   
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