The Fee Trap: Demurrage and Detention Charges at US Ports — What's Legitimate, What Isn't, and How to Push Back

Few line items on a shipping invoice generate as much frustration among US importers as demurrage and detention fees. Individually, a single charge might seem manageable. Collectively, across a year's worth of shipments, these fees can represent a significant and largely unplanned drain on operating margins. What makes them particularly difficult to manage is that the rules governing them are inconsistently applied, poorly communicated, and in some cases, structured in ways that make avoidance nearly impossible regardless of how efficiently an importer operates.

The Federal Maritime Commission (FMC) has acknowledged as much. Its 2020 interpretive rule on demurrage and detention — and subsequent enforcement attention under the Ocean Shipping Reform Act of 2022 — signaled that regulators are no longer treating these fees as entirely beyond scrutiny. But regulatory attention has not eliminated the problem. It has merely created new leverage for importers willing to understand the rules and use them.

Defining the Charges: Where Most Importers Get Confused

The terms demurrage and detention are frequently used interchangeably in casual conversation, but they refer to distinct charges with different legal and contractual foundations. Conflating them is a mistake that weakens an importer's ability to dispute either.

Demurrage is a charge assessed by the terminal — not the ocean carrier — for cargo that remains inside the terminal beyond the allotted free time period. Free time is the window during which an importer may retrieve their container without incurring additional fees. Once that window closes, demurrage accrues on a per-day basis, typically escalating in tiers the longer the container remains.

Detention, by contrast, is a charge levied by the ocean carrier for a container that has left the terminal but has not been returned within the carrier's allowed free time for equipment use. An importer who picks up a container but cannot return the empty unit promptly — due to warehouse capacity issues, equipment shortages, or scheduling conflicts — will incur detention fees that accrue until the empty is returned to the carrier's designated depot.

Per diem and storage fees may also appear on invoices, sometimes overlapping with demurrage in ways that create double-billing risks. Storage fees charged by terminals on cargo held in their facilities can compound rapidly, particularly for containerized freight that cannot be retrieved due to factors outside the importer's control.

When Fees Are Justified — and When They Are Not

The legitimate purpose of demurrage and detention is to incentivize efficient use of port infrastructure and carrier equipment. Terminals have finite yard space. Carriers have finite container fleets. Fees that encourage prompt pickup and return serve a genuine operational function.

The problem arises when those fees are assessed in circumstances where the delay is not attributable to the importer. The FMC's interpretive rule established a clear principle: demurrage and detention charges should serve their intended incentivizing purpose. When an importer is physically or administratively prevented from retrieving their cargo — due to terminal congestion, vessel delays, equipment unavailability, or customs holds initiated by government agencies — assessing fees against that importer is inconsistent with the rule's intent.

Yet this continues to happen with regularity. Importers have documented cases in which demurrage began accruing before the terminal issued a pickup availability notice. Others have been charged detention for periods during which the carrier's own depots were closed or not accepting empty returns. These are not edge cases manufactured for litigation; they represent systemic billing practices that have persisted because many importers lack the documentation infrastructure to challenge them effectively.

Regional Variations in Billing Practices

Demurrage and detention practices are not uniform across US ports, and importers who operate across multiple gateways should be aware of meaningful regional differences.

At the Ports of Los Angeles and Long Beach — which together handle roughly 40 percent of US containerized imports — congestion-related demurrage disputes have been among the most prominent in the country, particularly during the supply chain disruptions of 2021 and 2022. The sheer volume of cargo moving through these facilities creates conditions in which delays are common and the potential for disputed fees is correspondingly high.

On the East Coast, the Port of New York and New Jersey and the Port of Savannah have each seen growth in import volumes that has, at times, strained terminal capacity and extended dwell times. Savannah in particular experienced significant congestion during the pandemic period, leading to elevated demurrage exposure for importers whose cargo was caught in the backlog.

Gulf Coast ports, including Houston, have generally maintained more manageable dwell times, though the rapid growth of nearshoring-related trade flows is beginning to test that capacity as well.

Understanding these regional dynamics matters because the practical leverage an importer has in disputing fees varies by market. At high-volume, congested ports, documented patterns of terminal-side delays provide stronger grounds for dispute. At less congested facilities, the importer's own operational efficiency becomes a more significant factor in fee exposure.

A Practical Framework for Challenging Unfair Charges

Disputing demurrage and detention successfully requires preparation that begins before the invoice arrives, not after.

Document everything in real time. The most common reason importers lose fee disputes is insufficient contemporaneous documentation. Maintain timestamped records of pickup availability notices, appointment requests, equipment availability confirmations, and any terminal or carrier communications that indicate a delay was not caused by your operation. Screenshots, emails, and portal records all constitute usable evidence.

Know your free time windows before cargo arrives. Tariff terms, including free time allowances, are published by both carriers and terminals. Review these before each shipment and calendar the expiration dates. Importers who are surprised by free time windows closing are importers who did not read the applicable tariff — and that is a weak position from which to dispute a charge.

Invoke the FMC framework explicitly. When submitting a dispute, reference the FMC's interpretive rule on demurrage and detention and the Ocean Shipping Reform Act of 2022. Carriers and terminals are aware of their regulatory obligations, and a dispute letter that demonstrates knowledge of the regulatory context is taken more seriously than a generic complaint.

Escalate strategically. Initial disputes are typically handled by carrier or terminal customer service teams with limited authority. If the initial response is unsatisfactory, escalate to the carrier's commercial or compliance team. For significant charges, engaging a licensed customs broker or freight attorney with experience in FMC matters may be warranted. The FMC also accepts complaints directly from shippers, and the existence of that option is itself a negotiating tool.

Negotiate prospectively, not just reactively. Importers with sufficient volume have leverage to negotiate demurrage and detention terms before they sign service contracts. Extended free time windows, caps on fee escalation, and carve-outs for government-caused delays are all terms that have been successfully negotiated by well-prepared shippers.

The Regulatory Horizon

The Ocean Shipping Reform Act represented a meaningful shift in the regulatory posture toward demurrage and detention, but implementation remains a work in progress. The FMC continues to develop rules that would codify billing standards more precisely, and enforcement actions against carriers with abusive fee practices have increased. Importers should monitor FMC rulemaking actively, as forthcoming regulations may expand the grounds on which charges can be formally disputed.

For now, the most effective protection remains operational: rigorous documentation, a clear understanding of applicable tariff terms, and a willingness to challenge charges that do not withstand scrutiny. At Hai Mark Line, we view demurrage and detention management not as an afterthought but as an integral component of compliant, cost-controlled import operations. The fees may be unavoidable in some circumstances, but accepting every invoice without review is a choice — and an expensive one.