Laytime

Demurrage vs detention

Published 20 August 2026 · updated 22 September 2026

Demurrage and detention get used as though they were one word with two spellings. They are not. One is a sum agreed before the delay happens, the other is a loss proved after it, and they sit under different instruments. Container shipping then borrows both words for something else again, which is where most of the confusion online comes from.

Demurrage: a price agreed in advance

Demurrage is liquidated damages under a voyage charter. The parties fix the laytime allowed for loading and discharging, and in the same clause they fix what the charterer pays per day if the ship is held beyond it. The rate is money agreed before anyone knows whether there will be a delay at all.

The figure itself falls out of allowed time minus time used, multiplied by that daily rate. There is a free laytime and demurrage calculator on this site that does it, and a walk through the whole calculation behind it.

That makes demurrage easy to claim and hard to argue with. The owner does not prove a loss. They prove time: laytime allowed, laytime used, the difference multiplied by the agreed rate and pro rated for part days. If the true cost of the delay was greater than the rate, the owner still gets the rate. If it was less, the charterer still pays it. Neither side gets to go behind the number they signed.

Two consequences follow, and both cost money.

• Demurrage runs continuously. The usual position is captured in the maxim “once on demurrage, always on demurrage”: the exceptions that suspended laytime, weekends, holidays, rain, shifting, stop applying once the ship is on demurrage. The clock runs through them. How far that holds depends on the wording, and a clause that says an exception applies “to laytime and demurrage” is doing exactly that job on purpose.
• Demurrage belongs to the voyage charter. Under a time charter the charterer is already paying hire for every day, so time lost in port is their own money burning. There is nothing left to liquidate. The time charter equivalents are off-hire and, where the ship is delivered late or redelivered outside the agreed range, a claim of a different shape entirely.

There is a long-running argument, and the answer moves with the governing law, about whether the demurrage rate liquidates every loss flowing from the delay or only the loss of the use of the ship. Where prolonged delay causes a different kind of loss, cargo deterioration for instance, whether that sits inside the rate or beside it is decided by the law of the contract, not by a rule of thumb.

Detention: damages you have to prove

Detention, properly damages for detention, is the ordinary contractual remedy: the ship was detained beyond what the contract contemplated, the charterer is in breach, and the owner claims the loss that breach caused. Nothing about the amount was agreed in advance. It is unliquidated, which means proved rather than assumed.

It arises in three recognisable situations.

1. There is no demurrage provision at all. Uncommon in a modern form, but a short fixture note or a berth charter written in a hurry can leave the gap. Without an agreed rate there is no demurrage to claim, so the delay is a detention claim by default.
2. Demurrage has run its agreed course. Some charters allow a fixed number of demurrage days, say ten running days, and then stop. After that the ship is on detention, and the owner is back to proving actual loss rather than applying a rate.
3. The delay sits outside the laytime regime. Laytime and demurrage measure cargo operations. Time lost for other reasons is not what the clause was counting: a berth never nominated, a cargo never provided, the ship held after completion of discharge waiting for documents or for the charterer to release her. That is detention.

Proving it means showing the breach, showing the delay it caused, and quantifying it, usually by what the ship would have earned over the period. That is more work than a laytime calculation, and the recovery can land above the demurrage rate or below it. A charterer generally prefers a demurrage clause for exactly that reason. It caps their exposure at a number they chose.

Despatch, the mirror in the dry trades

If the charterer finishes early, dry cargo charters commonly pay them back. Despatch is conventionally half the demurrage rate, and it is worth checking which basis the clause uses, because they are not the same money:

• All time saved counts every hour between completion and the moment laytime would have expired, including excepted periods such as weekends.
• Working time saved, sometimes written as laytime saved, counts only the laytime hours that were not used.

All time saved is the more generous of the two and a charterer will ask for it. Tanker charters normally have no despatch at all. There is no detention equivalent on this side of the ledger either: finishing early is nobody’s breach, so there is nothing to prove.

The same two words in container shipping

Search either term and most of what comes back is about boxes, not ships. In liner and container trades:

• Demurrage is charged when a container sits inside the terminal beyond the free time, typically an import box not collected after discharge.
• Detention, also called per diem, is charged when the container is outside the terminal in the merchant’s hands beyond the free time, running until the empty is returned.

Say plainly what this is: the same word for an unrelated thing. These charges are levied by a carrier against a merchant under a bill of lading and a published tariff. There is no charterparty, no laytime, no statement of facts, no rate negotiated between owner and charterer. Usage is not even consistent within the container world, since carriers and regions differ on which is which and some bill the two together, and billing practice in this area is regulated in some jurisdictions and not in others. If the page you are reading mentions free days, gate-out and empty returns, it is the box meaning. If it mentions notice of readiness and a statement of facts, it is the ship meaning.

The ship-side word does reach a bill of lading occasionally, but by a different route: a charterparty demurrage clause binds a shipper or receiver only where the bill incorporates it and the wording is wide enough to catch them. That is a question of incorporation, decided case by case, and not something to assume.

Time bars, and why claims die on paper

More demurrage claims are lost on documentation than on merits, and it is not close.

Most modern charters, tanker forms especially, put a documentary time bar on the demurrage claim. The owner must present the claim within a stated period after completion of discharge, ninety days being common, together with the supporting documents the clause names. Miss the period, or omit one named document, and the claim is barred outright. The bar is usually absolute: a claim that is correct to the hour and clearly owed is extinguished anyway.

The documents that go missing are always the same ones. The statement of facts unsigned by the terminal or the agent. The notice of readiness not attached. The pumping log, the timesheet, the letters of protest. A document in a language the clause does not accept. The calculation sent to the broker rather than to the party the clause names. None of these are arguments about how long the ship waited, and none of them can be repaired after the period closes.

Detention claims usually escape the clause-based bar, since the clause is written about demurrage, and fall back on the general limitation period under the law of the contract. That sounds like an advantage and mostly is not. The trade is a longer window against a much heavier burden of proof, and the proof still comes out of the same port records that the demurrage claim would have needed.

Which is the practical point behind both words. The distinction between agreed damages and proved damages decides how a claim is argued, but the port record decides whether it survives at all. Keep the timeline complete, timed, signed and in one place, and both claims remain available. Tidy it up afterwards and neither does.

References

• BIMCO, CMI, FONASBA and the Baltic Exchange, Laytime Definitions for Charter Parties 2013, 2013. fonasba.com
• West of England P&I Club, Detention in a nutshell. westpandi.com
• Court of Appeal of England and Wales, K Line Pte Ltd v Priminds Shipping (HK) Co Ltd (The Eternal Bliss) [2021] EWCA Civ 1712, 2021. caselaw.nationalarchives.gov.uk
• Skuld, Timebar for demurrage claims, 2015. skuld.com
• Federal Maritime Commission, FMC publishes final rule on detention and demurrage billing practices, 2024. fmc.gov

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