What is demurrage

Demurrage is the set of fees charged by the port after a container has been in their possession for over 3 days.

Typically this is caused by the failure to clear goods through customs, or the failure to pay the factory in a timely manner.

This fee is not charged by the government but by the private company that owns the port. These fees are a large profit center for the ports, so they are typically almost impossible to recover once charged. The ports have your goods and will not release them until demurrage is paid, and since they are both in the legal right and have physically possession of your goods, you are almost completely powerless.

Demurrage fees vary from container yard to container yard and depending on the size of your container, but a typical rate structure is something like this:

40′ container
Day 0-3: free
Day 4-10: $100/day
Day 11-20: $200/day

These fees can add up quickly. A 7 container shipment stuck in demurrage for 15 days can have fees as high $10,000.

KLine demurrage fees: http://www.kline.com/KAMContainers/Standard-Import_Export-Free-Time-and-Demurrage-Rules.shtml

Tips for avoiding demurrage

Demurrage is a thorn in the side of importers large and small.  It can result in huge fees, delayed shipments to customers, and problems with your factory.

The following will help you avoid demurrage.

1:  Choose a customs broker you can depend on to submit documents to US Customs rapidly, communicate with you when there is an issue, and tell you the truth at all times.

2:  Always pay your factory at least 7 days before the goods land in port.  Explain in clear language to your factory that they must provide you with all documents

3:  In your contract with the factory, insist that they pay demurrage fees if they fail to provide you the following documents in a timely manner.

Bill of Lading
Commercial Invoice
Packing List
Arrival Notice