Laytime

Demurrage vs detention

Published 20 August 2026 · updated 17 October 2026

People often use demurrage and detention as if they were the same word spelled two ways. They are different. Demurrage is a sum agreed before any delay happens, while detention is a loss that has to be proved after it, and each rests on a different legal basis. Container shipping then uses both words for something else again, which causes most of the confusion you will find online.

Demurrage: a price agreed in advance

Demurrage is liquidated damages under a voyage charter, meaning damages fixed in the contract in advance. The parties agree the laytime, which is the time allowed for loading and discharging, and in the same clause they agree what the charterer pays per day if the ship is kept longer. That rate is settled before anyone knows whether there will be a delay at all.

The amount is the time used beyond the time allowed, multiplied by the daily rate. This site has a free laytime and demurrage calculator that does the arithmetic, and a walk through the whole calculation behind it.

This makes demurrage easy to claim and hard to dispute. The owner does not have to prove a loss, only the time: the laytime allowed, the laytime used, and the difference multiplied by the agreed rate, with part days paid in proportion. If the delay really cost the owner more than the rate, the owner still receives only the rate. If it cost less, the charterer still pays the full rate. Neither side can argue for a different amount from the one it agreed.

Two consequences follow, and both cost money.

• Demurrage runs continuously. The usual rule is summed up in the saying “once on demurrage, always on demurrage”. The exceptions that paused laytime, such as weekends, holidays, rain or moving the ship between berths, stop applying once the ship is on demurrage, and the clock runs through them. How far this holds depends on the wording. A clause saying an exception applies “to laytime and demurrage” is written that way precisely to change the rule.
• Demurrage belongs to the voyage charter. Under a time charter the charterer already pays hire for every day, so time lost in port is the charterer's own money being spent and there is nothing left to fix in advance. The time charter equivalents are off-hire (periods when hire stops) and, if the ship is delivered late or returned outside the agreed area, a different kind of claim altogether.

There is a long-running debate about whether the demurrage rate covers every loss caused by the delay or only the loss of the use of the ship, and the answer depends on the law that governs the contract. When a long delay causes a different kind of loss, such as damage to the cargo, the law of the contract decides whether that loss is inside the rate or can be claimed in addition. No simple rule settles it.

Detention: damages you have to prove

Detention, or more precisely damages for detention, is the ordinary remedy for breach of contract. The ship was held longer than the contract allowed, the charterer is in breach, and the owner claims the loss that the breach caused. Nothing about the amount was agreed in advance. The damages are unliquidated, which means the owner must prove them rather than rely on a set rate.

Detention arises in three familiar situations.

1. The charter has no demurrage clause at all. This is rare 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 becomes a detention claim by default.
2. The agreed demurrage period has run out. Some charters allow a fixed number of demurrage days, for example ten running days, and then stop. After that the ship is on detention, and the owner must again prove the actual loss instead of applying a rate.
3. The delay falls outside the laytime system. Laytime and demurrage measure cargo work. Time lost for other reasons is not what the clause was counting: a berth that was never named, a cargo that was never supplied, or a ship held after discharge while it waits for documents or for the charterer to release it. That is detention.

To prove detention, the owner must show the breach and the delay it caused, and then put a value on that delay, usually by what the ship would have earned over the period. This takes more work than a laytime calculation, and the amount recovered can end up above or below the demurrage rate. Charterers generally prefer a demurrage clause for exactly this reason, because it limits their risk to a figure they agreed.

Despatch, the mirror in the dry trades

If the charterer finishes loading or discharging early, dry cargo charters usually pay money back. This is despatch, and it is normally half the demurrage rate. Check which basis the clause uses, because the two give different amounts:

• All time saved counts every hour between the end of cargo work and the moment laytime would have run out, including excluded 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 basis, and a charterer will ask for it. Tanker charters usually pay no despatch at all. There is also no equivalent of detention on this side: finishing early is not a breach by anyone, so there is nothing to prove.

The same two words in container shipping

If you search for either term, most results are about containers, not ships. In liner and container trades the words mean this:

• Demurrage is charged when a container stays inside the terminal for longer than the free time, typically an import container not collected after discharge.
• Detention, also called per diem, is charged when the container is outside the terminal with the customer for longer than the free time. It runs until the empty container is returned.

To be clear, this is the same word used for an unrelated thing. A carrier charges these fees to a customer under a bill of lading and a published tariff. There is no charterparty, no laytime, no statement of facts and no rate negotiated between owner and charterer. The container world does not even use the words consistently: carriers and regions differ on which is which, some bill the two together, and some countries regulate these charges while others do not. If the page you are reading talks about free days, gate-out and empty returns, it means containers. If it talks about notice of readiness and a statement of facts, it means ships.

The ship meaning does sometimes reach a bill of lading, but by a different route. A charterparty demurrage clause binds a shipper or a receiver only if the bill incorporates it and the wording is wide enough to cover them. That is a question of incorporation, decided case by case, and you should not assume it.

Time bars, and why claims die on paper

Far more demurrage claims are lost because of missing documents than because the claim was wrong.

Most modern charters, and tanker forms in particular, set a documentary time bar on demurrage claims. The owner must submit the claim within a stated period after discharge ends, often ninety days, together with the supporting documents the clause lists. If the owner misses the deadline or leaves out one listed document, the claim is barred. The bar is usually absolute, so a claim that is correct to the hour and clearly owed is still lost.

The documents that go missing are always the same: a statement of facts not signed by the terminal or the agent, a notice of readiness that was not attached, the pumping log, the timesheet or the letters of protest. Sometimes a document is in a language the clause does not accept, or the calculation goes to the broker instead of the party the clause names. None of these failures has anything to do with how long the ship waited, and none can be fixed once the deadline has passed.

Detention claims usually fall outside the time bar in the clause, because the clause was written about demurrage. They are subject instead to the general limitation period in the law of the contract. That sounds like an advantage, but mostly it is not. The owner gets a longer deadline in exchange for a much heavier burden of proof, and the proof still comes from the same port records the demurrage claim would have needed.

That is the practical point behind both words. The difference between agreed 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 stay available. If entries are removed or rewritten afterwards, neither claim 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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