Demurrage and detention in Canada are among the most expensive and misunderstood cost drivers in container shipping. Importers often face unexpected invoices simply because a container was not picked up or returned within the allowed free time. In this guide, we explain how demurrage and detention work in Canada, why these charges happen, how they are calculated, and—most importantly—how businesses can reduce their exposure through proper planning and experienced logistics coordination.
What Is Demurrage and Detention in Container Shipping?
Demurrage and detention are time-based charges applied to containers, but they apply at different stages of the shipping process.
Demurrage applies when an import container stays at a port or terminal longer than the allowed free time after it becomes available for pickup. Once free time expires, daily demurrage charges begin to accrue until the container leaves the terminal.
Detention, on the other hand, applies after the container leaves the terminal. If the container is not returned empty to the designated depot within the allowed free time, detention fees are charged per day.
In simple terms:
- Demurrage = container stayed too long at the terminal
- Detention = container returned too late after pickup
Understanding this distinction is critical for importers shipping containers through Canadian ports and rail terminals.
Demurrage vs Detention: Key Differences
Although these charges often appear together on invoices, they are triggered by different operational failures.
| Factor | Demurrage | Detention |
|---|---|---|
| Where it applies | Port, rail, or marine terminal | Outside terminal (after pickup) |
| Trigger | Container not picked up on time | Container not returned on time |
| Charged by | Terminal or carrier | Ocean carrier |
| Common causes | Congestion, customs exams, missed appointments | Delays at consignee, unloading issues |
In Canada, both charges can escalate quickly if container pickup, drayage scheduling, or return logistics are not tightly managed.
How Demurrage and Detention Work in Canada
Demurrage and detention rules in Canada depend on several variables, including the port, terminal operator, rail ramp, and ocean carrier. However, the general workflow remains consistent across Toronto, Montreal, Vancouver, and Halifax.
Free Time in Canada
Most Canadian terminals allow a limited number of free days, typically ranging from 3 to 7 calendar days. Free time usually starts when the container becomes available after discharge or rail arrival—not when the consignee is ready.
If the container is not picked up within that window, demurrage charges begin automatically.
How the Clock Starts
The demurrage clock typically starts when:
- The container is discharged from the vessel or railcar
- The terminal releases the container as available
- Any mandatory holds (security, customs, carrier) are cleared
Importantly, weekends and holidays may or may not count depending on terminal rules.
Real Demurrage and Detention Scenarios in Canada
To understand how quickly costs escalate, consider the following real-world scenarios faced by Canadian importers.
Scenario 1: Port of Vancouver Congestion
An importer receives a container at the Port of Vancouver during peak congestion. Although the container is technically available, terminal appointment slots are fully booked for several days. Free time expires before a pickup appointment can be secured, triggering demurrage charges.
Key takeaway: Availability does not guarantee access. Without proactive appointment booking, demurrage becomes unavoidable.
Scenario 2: Customs Hold in Montreal
A container arriving in Montreal is selected for a CBSA customs exam. The hold lasts several days, consuming most of the free time. Once released, only one free day remains, leaving no margin for trucking delays.
Key takeaway: Customs exams are not predictable, but experienced planning can minimize post-release delays.
Scenario 3: Rail Ramp Delays in Toronto
A container moves inland via rail to a Toronto intermodal terminal. Due to terminal congestion and chassis shortages, pickup is delayed. Demurrage accrues even though the delay is outside the importer’s control.
Key takeaway: Rail demurrage is often overlooked but can be just as costly as port demurrage.
Scenario 4: Late Empty Return in Halifax
After delivery, unloading takes longer than expected at the consignee’s facility. The empty container misses the return window, triggering detention charges charged by the ocean carrier.
Key takeaway: Detention often results from warehouse or unloading bottlenecks rather than terminal issues.
How Demurrage and Detention Charges Are Calculated
While rates vary by carrier and terminal, demurrage and detention charges in Canada are typically calculated on a per-container, per-day basis.
Factors that influence cost include:
- Container size (20ft vs 40ft)
- Carrier tariff rules
- Terminal or rail operator
- Peak season surcharges
- Total days beyond free time
Rates usually escalate the longer the container remains overdue, which is why early intervention is critical.
Who Pays Demurrage and Detention Charges?
In most cases, the importer or consignee is responsible for demurrage and detention charges, even if the delay was caused by third parties such as terminals, customs, or rail operators.
Because carriers invoice strictly based on timestamps, disputes can be difficult without proper documentation.
How to Avoid Demurrage and Detention in Canada
While these charges cannot always be eliminated, they can often be reduced or avoided entirely through proactive logistics management.
Practical Prevention Strategies
- Monitor container availability daily
- Book terminal appointments as early as possible
- Align drayage pickup with rail or vessel discharge schedules
- Ensure unloading facilities are prepared in advance
- Plan empty container returns before delivery occurs
In addition, working with experienced container drayage and intermodal trucking providers significantly reduces risk exposure.
Documentation That Matters for Disputes
If charges occur, documentation is essential for review or dispute.
Key documents include:
- Equipment Interchange Receipt (EIR)
- Terminal availability timestamps
- Appointment confirmations
- Proof of delivery (POD)
- Empty return confirmation
Without these records, disputing demurrage or detention invoices is extremely difficult.
Why Experience Matters in Managing Demurrage Risk
Demurrage and detention are rarely caused by a single failure. Instead, they result from small breakdowns across multiple touchpoints—terminal access, drayage coordination, rail scheduling, warehouse readiness, and carrier communication.
Experienced logistics providers understand how these systems interact and plan around bottlenecks before they become costly problems.
Final Thoughts: Managing Demurrage and Detention Proactively
Demurrage and detention in Canada are not just administrative fees—they reflect how efficiently a container moves through the supply chain. Companies that treat container logistics reactively often absorb unnecessary costs. Those that plan proactively protect margins and maintain predictable transit times.
If your business regularly ships import containers through Canadian ports or rail terminals, professional planning and execution are essential.
Talk to a Container Logistics Expert
If you want to reduce demurrage and detention exposure on your shipments, our team can help assess routing, scheduling, and container return strategies across Canada.
📞 +1 (365) 829-5000
📧 service@metropolitanlogistics.ca
