How to Master Detention & Demurrage Costs

Detention and demurrage charges remain one of the most unpredictable and frustrating costs in global logistics for freight forwarders, importers, and exporters. With fees ranging from $75 to $300 per container per day, they can consume a significant portion of freight budgets, often totaling 10-20% of overall shipping costs. 

Worse yet, these fees are highly volatile – driven by fluctuating port congestion, inconsistent free time policies, and last-minute carrier adjustments.

For many companies, these charges feel like an inefficiency tax, with them paying whatever appears on an invoice without knowing if the charge is even justified! What if there were a way to eliminate this complexity, turning detention and demurrage from an unpredictable cost burden, into a strategic advantage? 

The path to mastering D&D costs in 2025 is not just about reducing fees – it involves transforming the way businesses manage, track, and validate them before they become financial burdens.

But before we get to that, some quick background…

While both detention and demurrage charges penalize inefficiency in container flow, they apply at different stages of the shipping process.

Demurrage is charged when a full container remains at the port beyond the allowed free time. Once a container reaches the port of destination (PoD), there is a grace period – typically ranging from a few days to a week – during which the consignee must collect the shipment. If the container is not picked up in time, demurrage fees begin accruing daily. These charges are intended to keep containers moving and prevent congestion at ports.

Detention, on the other hand, applies after a full container has been picked up, but has not been returned within the agreed timeframe. Once an importer receives a container, they are given a set number of days to unload and return the empty unit. If the container is not returned within this period, detention fees apply. These charges exist to ensure that containers are promptly returned to circulation and available for future shipments.

In both cases, failing to manage these timelines efficiently leads to avoidable costs, disputes, and operational headaches.

Many in the industry believe that detention and demurrage charges are an unavoidable cost of doing business, but this is far from the truth. Let’s debunk three common myths:

Myth #1: Huge detention and demurrage fees are unavoidable.
Many believe that huge charges are just part of the shipping process. In reality, businesses that leverage real-time tracking, predictive analytics, and automated alerts can anticipate and avoid many of the largest bills. 

Myth #2: Carrier invoices are mostly accurate.
Carriers process thousands of invoices daily, and errors are common. Without invoice validation and cross-referencing shipment timestamps, businesses often end up paying incorrect or inflated charges.

Myth #3: It’s impossible to track D&D costs in real time.
While traditional manual tracking is slow and unreliable, modern solutions provide live container tracking, milestone alerts, and automated tariff calculations, making real-time cost management a reality. In fact, the entire process can be automated and customized…

Detention and demurrage (D&D) charges are among the most persistent and costly challenges in freight forwarding and supply chains. Forwarders operate in a chaotic, high-volume environment with fragmented ecosystems and highly variable contracts that differ by carrier, port, cargo type, currency, and customer terms.

They must navigate an ever-shifting landscape where ports enforce changing operational rules – from fluctuating working hours to restricted gate access – while carriers dictate last-free-day policies and adjust D&D charges with little notice, even mid-transit. This unpredictability makes cost control nearly impossible, creating financial strain and operational chaos.

This leads to an operational nightmare for forwarders, importers, and exporters managing thousands of containers at any given time. The sheer complexity of navigating carrier tariffs, port-specific regulations, and last-minute policy changes makes it nearly impossible to accurately calculate and control D&D costs. 

Manual processes simply cannot keep pace with the sheer volume and variability of rates, timelines, and conditions. As a result, stakeholders experience:

Unpredictable costs and budget disruptions

D&D fees fluctuate constantly. Free-time policies vary by carrier, contract, port, and cargo type, making it nearly impossible to predict charges in advance. Unexpected delays – whether due to customs holds, port congestion, or scheduling issues – can quickly escalate costs. Without real-time tracking and accurate forecasting, businesses are left vulnerable to last-minute surprises that disrupt financial planning.

Billing delays and cash flow bottlenecks

One of the most frustrating aspects of D&D fees is the delay in receiving invoices. Carriers often issue invoices weeks (or even months!) after the charges were incurred, making it difficult to allocate costs properly. 

This lag slows down reconciliation, ties up working capital, and increases the risk of paying for charges that may have been avoidable. Businesses that lack a structured validation process often find themselves blindly paying invoices, simply because they lack the data to dispute them.

Customer disputes and churn

When forwarders pass D&D costs to their customers, unclear invoicing often leads to disputes. Clients frequently question why they are being charged, especially when explanations are vague or inconsistent. 

Without transparent cost breakdowns or documented timestamps, these disputes become time-consuming and damaging to customer relationships. Poorly managed disputes not only slow down payments, but can also result in customer churn, as frustrated clients seek more reliable service providers.

Operational inefficiencies and manual workload

Many companies still rely on manual processes to track, calculate, and dispute D&D charges – a time-consuming and error-prone approach. Operations teams spend hours combing through spreadsheets, cross-referencing invoices with shipment data, and attempting to match carrier tariffs. As the number of containers increases, this manual workload becomes unsustainable, leading to delays, errors, and lost revenue.

Missed cost-saving opportunities

Without real-time visibility into D&D costs, businesses are unable to take proactive steps to optimize free time usage, negotiate better terms, or prevent unnecessary fees. Carriers and ports rarely provide easy-to-access data, leaving companies at a disadvantage when it comes to managing costs efficiently.

One of the biggest obstacles to effective D&D management and automation is incomplete or inaccurate shipment data. Missing or delayed timestamps – such as actual time of arrival (ATA) and actual time of departure (ATD) – can lead to incorrect charges. Many carriers do not consistently provide these updates, leaving businesses reliant on incomplete or outdated information when validating invoices.

Additionally, as noted previously, carrier-reported milestones are often unreliable, making it difficult to verify when charges should apply. Businesses that rely on manual tracking or outdated systems lack the visibility needed to contest incorrect fees. The ideal approach to D&D cost management is built on real-time, automated data collection, ensuring accuracy in tracking and invoicing.

With AI’s ability to analyze patterns, predict risks, and break down unstructured data, we can finally transition D&D from an unpredictable liability, into a manageable, strategic expense.

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. 

Designed to eliminate the persistent cost uncertainty plaguing freight forwarders, importers, and exporters, the solution processes customer contracts at scale, and communicates actual D&D costs in real time. It accounts for all variables, ranging from tariff extraction, to shipment mapping and contract details.  

Windward’s D&D Automation solution eliminates inefficiencies by providing a real-time, automated approach to detention and demurrage management. The platform takes into account customer-specific tariffs, account port-specific terms, free days, holidays, and working hours.

D&D cost management shouldn’t be a black box. Stop relying on carrier invoices and manual calculations that drain cash flow and lead to costly errors.

See how fast, easy, and accurate your charges can be. Receive real-time cost estimates in just a few clicks and three easy steps – no more surprises, no more guesswork.

Click here.

The question is no longer whether D&D can be optimized, but whether companies will embrace the intelligence-driven approach that makes it possible. Are you ready to move from reactive “firefighting” to true mastery?

The future of D&D cost management is not about simply accepting these charges as a cost of doing business – it involves leveraging automation and generative AI to turn detention and demurrage from an unpredictable liability, into a controllable expense.

Businesses that take a strategic, technology-driven approach will reduce costs, improve efficiency, and gain a competitive edge this year. 

Don’t wait for the next invoice shock – start mastering your D&D costs today.