How Is Demurrage Calculated? Understanding Shipping Container Charges
How Is Demurrage Calculated? To calculate demurrage in shipping , you generally need three pieces of information: The date and time when the demurrage clock starts. The amount of free time allowed by the carrier or terminal. The applicable demurrage rate after free time expires. The basic formula is: Demurrage Charge = Chargeable Demurrage Days × Applicable Daily Rate For example, if a container has 5 free days, remains at the terminal for 9 chargeable days, and the applicable rate is $100 per day: Demurrage = (9 − 5) × $100 = $400 However, real-world demurrage charges in shipping are often more complicated. Rates can increase after certain numbers of days, free time may be calculated using calendar or working days, and the start and end dates can vary by carrier, port, shipment direction, container type, and local tariff. That is why simply multiplying the number of days by one daily rate does not always produce the correct invoice. This guide explains how demurrage calculation work...