Why do demurrage charges matter?
Demurrage can add substantial costs quickly, especially for containers held during customs checks or delayed collections. A few days of storage fees can exceed the freight cost of a short route. For importers, demurrage also disrupts inventory plans, since goods held at a terminal cannot reach stores or warehouses until they are released.
How do demurrage charges work in logistics?
The carrier allows a set number of free days for collection or unloading, starting from the arrival date or the date the arrival notice is issued. If the cargo is not collected within that period, the carrier charges demurrage per day or per container. Charges continue until the cargo is collected or returned. The consignee or its forwarder must arrange customs clearance and collection to stop the charges from accumulating.
Industries that face demurrage charges
- Retail and fashion importers
- Electronics and appliance distribution
- Automotive parts supply
- Furniture and home goods importers
- Manufacturing with imported components
- Chemical and industrial raw materials importers
- Food and beverage importers
- Agricultural commodity trading
- Construction materials and building supply
- Machinery and heavy equipment importers
- Pharmaceutical and medical device imports
- Toys and consumer goods importers
- Sports and leisure equipment distribution
Example in practice
A fashion importer in Rotterdam, Netherlands has a 40-foot container of winter coats arriving at the Rotterdam port terminal. The carrier allows 5 free days for collection. The container is held for a customs inspection, and the importer’s customs broker submits the documents on day 9, four days after the free period ends. The terminal charges €120 per day, so the importer pays €480 of demurrage charges before collecting the container. Had the broker submitted the documents within the free period, no demurrage would have been charged.