Demurrage and Detention: Your Rights

Demurrage and Detention: Your Rights

Demurrage and detention charges are the fees that arrive after the container does, and small importers pay them more often than they should. The Federal Maritime Commission’s billing rule gives you three usable defenses: an invoice that misses required information cannot be collected, an invoice sent more than 30 days after the charge was last incurred cannot be collected, and a dispute must be answered within 30 days. Knowing them is worth more than any negotiation.

What is the difference between demurrage and detention?

Demurrage is time at the terminal. Detention is time with the box. Demurrage accrues while your container sits on port property past its free days, waiting for a truck, an appointment, or a payment. Detention accrues while the container is outside the terminal, empty or loaded, past the free days allowed before it must be returned.

The distinction matters because the clocks start and stop in different places, and the fix is different for each. Demurrage is usually a documentation or appointment problem. Detention is usually an unloading or return-trip problem.

The FMC treats them together. Its rule at 46 CFR Part 541 defines demurrage and detention as any charges, including per diem charges, assessed by ocean carriers, marine terminal operators, or NVOCCs related to the use of marine terminal space or shipping containers, but not including freight charges. Same rulebook, same defenses.

Why does a small pet importer get these bills at all?

Because free time is shorter than the process. A container that lands on a Friday with a broker who needs a missing document on Monday has already spent two of its free days doing nothing, and the carrier is not obliged to care why.

The usual causes are unglamorous and repeatable. A commercial invoice that does not match the entry, a missing bond, an ISF filed late, a hold for exam, a delivery appointment that is booked out, or a warehouse that cannot take the pallet on the day the truck arrives. None of them are the carrier’s fault, which is exactly why the charge sticks.

Volume makes it worse. A store importing a mixed container of crates, pens, and food is moving cube, not value, and bulky goods like crates and kennels mean fewer units per container and a higher cost per day of delay.

How long does the billing party have to send the invoice?

Thirty calendar days from the date the charge was last incurred. That is the core deadline in 541.7(a): the billing party must issue the invoice inside 30 calendar days of the date the charge was last incurred, and if it does not, the billed party is not required to pay the charge.

For an NVOCC there is a second clock. Under 541.7(b), an NVOCC must issue its invoice within 30 calendar days of the date it received the invoice from its own upstream billing party. Miss that, and the charge is not collectible from you either.

There is also a stacking rule for the case where the NVOCC is both billing and billed on the same charge. Under 541.7(c), when the NVOCC tells its carrier that you have disputed the charge, the carrier must give the NVOCC an additional 30 calendar days to pursue it.

Keep the invoice date and the last-incurred date side by side. A bill that arrives late is not a bill you have to argue about on the merits.

What happens if the invoice is missing information?

The obligation to pay disappears. Section 541.5 is unusually blunt: failure to include any of the required minimum information in the part eliminates any obligation of the billed party to pay the applicable charge.

That is a stronger remedy than it sounds, because it is not a defense you have to win on reasonableness. Either the information is on the invoice or it is not.

In practice, this turns the invoice itself into a checklist. Photograph or download it the day it arrives, before any portal access expires, and compare it item by item against the rule. If an element is missing, your response is not a negotiation about whether the charge was fair. It is a citation.

What has to be on a valid invoice?

At minimum, an invoice must tell you how to dispute it and what the dispute requires. Section 541.6 requires contact information, by email, telephone, or other appropriate means, for questions or requests for mitigation, refund, or waiver. It also requires digital means, such as a URL, QR code, or digital watermark, that direct the billed party to a publicly accessible website describing exactly what must be submitted to make that request succeed.

Then come the certifications, which are the part most worth reading closely. The invoice must state that the charges are consistent with the FMC’s demurrage and detention rules, including 46 CFR 545.5, and that the billing party’s own performance did not cause or contribute to the charges.

That second certification is the leverage. If the terminal could not take your truck, or the carrier did not provide the empty return location, the invoice is asserting something the facts do not support, and you can say so in writing with the specific dates.

Can they bill the wrong company?

They can try, and the rule gives them one chance to fix it. Under 541.7(d), if the billing party invoices an incorrect person, it may reissue to the correct billed party, but only within 30 calendar days of the date the charge was last incurred. Outside that window, the billed party is not required to pay.

This matters in the common structure where your customs broker, your forwarder, and your trucker all touch the file. A bill addressed to the wrong entity is not automatically yours to pay because someone forwards it to your inbox.

Check the named billed party against the party on the bill of lading and the delivery order. If they differ, respond in writing rather than paying and chasing a refund, because a payment is the strongest evidence that the charge was yours.

How do you dispute a charge?

In writing, within the window, with dates. Under 541.8(b), once a billing party receives a request for mitigation, refund, or waiver, it must attempt to resolve the request within 30 calendar days of receiving it, or on a later date both parties agree to.

A dispute that works is short and factual: the container number, the bill of lading, the dates the container was available, the dates you requested an appointment, what the terminal or carrier did or did not do, and the specific subsection you are relying on. Attach the invoice and the appointment records.

Ask for mitigation rather than a waiver when you have partial fault, and say so. Carriers grant mitigation routinely on first offenses; they resist anything framed as an accusation. Escalate to the FMC only after the written process fails, and keep the paper trail that shows it did.

What does the Shipping Act add?

A duty to be reasonable, and a ban on retaliation. Section 41102(c) of Title 46 prohibits a carrier, marine terminal operator, or ocean transportation intermediary from failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.

Subsection (d), added in 2022, bars retaliation: no refusing or threatening to refuse cargo space because a shipper patronized another carrier or filed a complaint. That protection is what makes a dispute safe to file, and it exists because the practice was common enough to legislate against.

The same 2022 law told the FMC to write the billing rule you are now using, which is why the invoice contents and deadlines in Part 541 read like a consumer-protection statute rather than a tariff.

How do you avoid the charge before it starts?

Know your free time in writing. It is set by the carrier’s tariff or your service contract, not by the port, and it differs by carrier, by lane, and by equipment. Ask for the number before you book, and put it in the routing instruction.

Then protect the clock. File the ISF on time, have the commercial invoice and packing list match the entry exactly, post the bond before the vessel arrives, and book the delivery appointment the day you get the arrival notice rather than the day the container discharges.

Detention has its own trap, and it is usually the empty return. The carrier designates where the empty goes, and that location can change while your container is still loaded. Confirm the return depot on the day you take delivery, keep the box out of the weather if it is a cardboard load, and return it before the free days run out rather than on the final day. A truck that reaches a closed depot on the last afternoon converts a per-day charge into a per-day charge plus a redelivery fee.

For a small store, the structural fix is often to stop importing full containers. Buying low-MOQ wholesale from a U.S. warehouse, or splitting a container with another retailer, removes demurrage and detention from your P&L entirely.

If you are comparing a direct dog food or cat food import against domestic wholesale, price the delay risk into the landed cost. A container that sits four days is not cheaper than a domestic pallet, whatever the unit price says. If a carrier has already billed you, send the invoice over and we will check it against the rule before you respond.

Sources: 46 CFR Part 541 (eCFR, 89 FR 14362); 46 U.S.C. 41102; 46 CFR 545.5.