4 Industry Expert Insights for Managing Detention & Demurrage

Detention and demurrage charges represent some of the most persistent and costly challenges in global logistics. Freight forwarders, importers, and exporters frequently encounter unpredictable and frustrating charges, ranging from $75 to $300 per container per day, quickly consuming substantial portions of their freight budgets – often reaching 10-20% of total shipping expenses. These fees are highly volatile, driven by unpredictable factors, such as fluctuating port congestion, inconsistent free time policies, and sudden carrier adjustments.

For many businesses, these charges feel like an unavoidable inefficiency tax, with companies regularly paying invoices without fully understanding or verifying their legitimacy. The chaos intensifies in the high-volume, fragmented environment of freight forwarding, where operators must juggle varying contracts, regulations, and operational rules across multiple carriers and ports.

Navigating this complexity becomes nearly impossible through traditional manual processes. Organizations frequently experience unpredictable costs, delayed billing cycles, disputes over unclear charges, operational inefficiencies from manual workload, and missed opportunities for cost savings, due to limited visibility into their true D&D expenses.

One of the keys to mastery is greater understanding, so let’s take a look at four insights that came up during the webinar that can really help freight forwarders, importers, and exporters. 

The geopolitical disruptions by the Houthis have severely impacted shipping operations in the Red Sea, leading to widespread congestion, delays, and increased costs. Understandably, the supply chain ecosystem has hyper-focused on this issue…but what about the day after? 

During the webinar, Lars Jensen, the CEO of Vespucci Maritime, warned that the true challenge still lies ahead:

“But the real killer here that everybody should be prepared for is actually that happy circumstance in the future when the Red Sea reopens. Because when the Red Sea reopens, you’re going to have such a barrage of cargo coming, especially in Europe and to some degree the U.S. East Coast. 

This is going to be an enormous problem…related to detention and demurrage.” 

The geopolitical disruptions by the Houthis have severely impacted shipping operations in the Red Sea, leading to widespread congestion, delays, and increased costs. Understandably, the supply chain ecosystem has hyper-focused on this issue…but what about the day after? 

During the webinar, Lars Jensen, the CEO of Vespucci Maritime, warned that the true challenge still lies ahead:

Bjorn revealed an uncomfortable industry truth during Windward’s detention and demurrage automation webinar: many beneficial cargo owners (BCOs) lack accurate visibility and control over their D&D expenses:

“I think the dirty secret of BCOs is that none of us know how much we’re really paying on a global level. We know that it’s rather large, but we only see the big ones where we have no choice but to intervene. There’s a massive dark number within any BCO of any reasonable size,” said Bjorn. 

These “hidden” charges accumulate significantly, creating major blind spots and financial leakage across operations. The issue is compounded by decentralized logistics and procurement structures, making visibility and accountability even more challenging. This problem highlights the critical need for sophisticated monitoring tools and centralized management of freight costs, particularly detention and demurrage automation. .

How bad can things get? The potential scale of unmanaged D&D fees can be staggering. Bjorn provided a striking example:

“I know one European BCO retailer, who shall remain nameless, who had a $235 million detention problem in Europe created by COVID. These are the ones we see, that’s when we start taking an interest.”

Such examples illustrate the severe financial risk posed by unmanaged D&D costs. Organizations must proactively audit and analyze their historical and current data to identify where significant financial risks exist and implement robust management and mitigation strategies.

The Ocean Shipping Reform Act (OSRA) was introduced to counter unfair practices around D&D billing, but rather than simplifying matters, it shifted and complicated accountability. Lars expressed clear reservations about its effectiveness:

The first step is stopping the bleeding, said Windward’s Joe Peak, Head of Supply Chain, during Windward’s webinar:

“The application of (automating D&D) particularly for BCOs – it can just sit over particular countries, manufacturing plants, and large import regions, to give immediate oversight in a P&L fashion, like where are you bleeding?” 

Windward’s newly launched Detention & Demurrage (D&D) Automation solution is the first step in a mission to empower global trade with Gen-AI powered automation.