Guide
Demurrage and detention leakage: where the money goes
Author: Outturn · Published: · Last reviewed:
Demurrage, detention and storage money leaks in five places: the clock start, stops and exceptions, free-time counting, the rate, and the documents. Most of it can be caught by recomputing each charge from your own events before you pay or invoice.
Definitions in short
- Demurrage (chartering): "an agreed amount payable to the owner in respect of delay to the Vessel once the Laytime has expired, for which the owner is not responsible" (BIMCO Laytime Definitions 2013). See laytime.
- Demurrage and storage (containers and terminals): typically charged while equipment or cargo stays inside the terminal beyond free time; [detention](/glossary#detention) while the carrier's equipment is outside the terminal beyond free time. Each tariff and contract sets the exact meaning.
- Rail wagon use: carriers charge for keeping their wagons beyond free time. For example, the LTG Cargo 2026 price list charges €2.16 per wagon-hour after 24 free hours for carrier-owned wagons.
More terms: glossary.
How big is it?
There is no reliable public figure for Baltic terminals. One vendor estimate puts dry-bulk demurrage at USD 8–10 billion a year, roughly 6–8 % of freight spend (Marcura, June 2026; a vendor's estimate, not independent data). Size your own exposure from your own volumes instead.
The five leaks
| # | Leak | Example of what goes wrong | Evidence needed |
|---|---|---|---|
| 1 | Clock start | The clock starts at arrival instead of the contractual event (placement, notice of readiness, discharge completion) | Event times from your own records |
| 2 | Stops and exceptions | Time the carrier or owner caused, weekends, holidays or weather exceptions are not deducted | Notifications, exception clauses, event log |
| 3 | Free-time counting | Free time restarted after a lot split, or counted in calendar days instead of hours | Contract clause, stock movements |
| 4 | Rate | Wrong tariff version, wrong equipment class, wrong currency | Tariff with its effective date |
| 5 | Documents | A valid claim is time-barred because a document was missing | A complete pack before the time bar |
Leak 5 is all-or-nothing. In *The MTM Hong Kong* [2020] EWHC 700 (Comm) a demurrage claim was held time-barred because copies of the bills of lading were not provided. In *The Amalie Essberger* [2019] EWHC 3402 (Comm) a claim survived: the supporting documents did not have to be sent together with the claim, only within the time bar.
Size it with your own numbers
Monthly exposure ≈ units per month × share charged × average disputed hours (or days) × rate.
You supply every input: wagons or containers per month, the share that is carrier-owned or charged, the average hours that differ from your own events, and the tariff rate. No default is assumed here.
A monthly control routine
- Collect the carrier's or line's statement and your own event export for the same period.
- Recompute every unit's chargeable time from your own events and the contract clause.
- Compare line by line; list differences above a threshold you set.
- Check documents for every disputed item: is every document the contract or time-bar clause requires present?
- Dispute or invoice with the evidence attached; note the deadline.
- Verify: after the credit note or invoice, recompute again. The difference should be gone.
Where Outturn fits, and where it stops
Outturn's Demurrage & Detention worker automates steps 2, 3 and 6 for rail wagon hours, clock stops, storage-organisation days, storage free time and truck turnaround. The Missing Document and Claims Recovery workers cover step 4.
Honest limits: vessel laytime calculation from the statement of facts is not an automated check today, and container-line detention outside the terminal is outside the terminal's own records, so Outturn does not compute it.
Related
Try the check on your own data
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Frequently asked questions
- What is the difference between demurrage and detention?
- In container shipping, demurrage is usually charged while equipment or cargo stays inside the terminal beyond free time, and detention while the carrier's equipment is kept outside the terminal beyond free time. In chartering, demurrage is an agreed amount payable to the shipowner for delay to the vessel once laytime has expired. The contract wording decides each case.
- Where does demurrage and detention money leak?
- In five places: the clock start, clock stops and exceptions, free-time counting, the rate applied, and missing documents that time-bar a valid claim.
- Can a demurrage claim be lost because of a missing document?
- Yes. In The MTM Hong Kong [2020] EWHC 700 (Comm) the court held a demurrage claim time-barred because copies of the bills of lading, which the charter party required as supporting documents, were not provided.
- How often should demurrage and detention charges be checked?
- Before each payment and at least monthly, while dispute windows and time bars are still open. The routine on this page covers the main steps.
Sources
- BIMCO, CMI, FONASBA, INTERCARGO, 'Laytime Definitions for Charter Parties 2013' (definitions of laytime and demurrage): https://www.bimco.org/media/qy2neqim/laytime-definitions-for-charter-parties-2013-v2.pdf (accessed 2026-10-06)
- CJC Law, 'Demurrage time bars – back in the courts again' (The MTM Hong Kong [2020] EWHC 700 (Comm)): https://www.cjclaw.com/site/news/demurrage-time-bars-back-in-the-courts-again (accessed 2026-10-06)
- CMS, 'Time bars and supporting documents in demurrage claims' (The Amalie Essberger [2019] EWHC 3402 (Comm)): https://cms.law/en/sgp/legal-updates/oil-gas-shipping-time-bars-and-supporting-documents-in-demurrage-claims (accessed 2026-10-06)
- LTG Cargo, Papildomų paslaugų kainynas PP-LTG Cargo (effective 2026-01-01): https://doc.ltgcargo.lt/lt/dokumentai/kainodara/Papildomu_paslaugu_kainynas_LTG_CARGO_2026.pdf (accessed 2026-10-06)
- Marcura, 'The four causes of demurrage leakage' (2026-06-16, vendor estimate): https://marcura.com/resources/blog/demurrage-claims-leakage (accessed 2026-10-06)