Understanding Demurrage and Detention: How to Avoid Costly Container Charges

Demurrage and detention charges represent one of the most significant hidden costs in container shipping, often catching importers and exporters by surprise. At Jebel Ali Port, these charges cost importers millions of dirhams annually. This comprehensive guide explains these charges and provides actionable strategies for minimizing their impact.

Defining Demurrage and Detention

Demurrage is charged when containers remain at the port or terminal beyond the allocated free time after vessel discharge. It compensates the terminal for storage space occupied by cargo that should have been collected.

Detention is charged when containers are held outside the port (at your warehouse or facility) beyond the free time allowed for unpacking and returning the empty container. It compensates the shipping line for equipment kept out of circulation.

Current Rates at Dubai Ports (2025)

Demurrage and detention rates vary by shipping line and container type. Based on published tariffs:

For 20ft dry containers at Jebel Ali: demurrage typically ranges from AED 70-150 per day for days 1-7 after free time, increasing to AED 150-250 per day thereafter. For 40ft containers, rates are approximately double: AED 140-300 for days 1-7, rising to AED 300-500 per day.

Refrigerated containers (reefers) command higher rates due to power costs: AED 200-400 per day for 20ft, AED 400-800 per day for 40ft units.

Terminal storage charges at DP World Jebel Ali are separate: approximately AED 25-50 per TEU per day for standard cargo, with higher rates for hazardous or oversized cargo.

Free Time Allocations

Standard free time at Dubai ports is typically 7-10 days combined (demurrage + detention) for import cargo, though this varies significantly by carrier and contract terms. Free zone cargo often receives extended free time of up to 14 days.

Major shipping lines like Maersk, MSC, and Hapag-Lloyd offer extended free time for volume shippers through negotiated service contracts. The difference between 5 and 14 days free time can save thousands of dirhams on a single shipment if customs delays occur.

Common Causes of Charges

Customs clearance delays account for 60-70% of demurrage charges in Dubai. Incomplete documentation, HS code classification disputes, and inspection requirements can extend clearance by days or weeks.

Specific UAE customs requirements causing delays include: missing Certificate of Conformity (for consumer goods), incomplete product registration (for food/cosmetics), and missing Ministry of Agriculture permits (for plants and soil).

Prevention Strategies

Pre-arrival documentation through Dubai Trade portal should be submitted 48-72 hours before vessel arrival. The system allows advance customs processing before the container is discharged.

For Authorized Economic Operator (AEO) status holders, green channel clearance can reduce customs processing to 4-6 hours, virtually eliminating demurrage risk for compliant shipments.

Dispute Resolution

When charges seem unreasonable, dispute them within 30 days with documented evidence. Port congestion, vessel delays, and carrier errors can justify charge waivers.

Dubai Maritime City Authority (DMCA) mediates disputes between shippers and carriers when direct negotiation fails. Documentation requirements include gate tickets, customs timestamps, and proof of timely document submission.