What is demurrage in container shipping?

In container shipping, demurrage refers to a fee charged by the shipping line to the cargo owner or the charterer for not loading or unloading the container from the vessel within the agreed upon free time at the port. The free time is a period of time granted by the shipping line in which the cargo owner or charterer can load or unload the container without incurring any additional charges.

Once the free time expires, the cargo owner or charterer will be charged demurrage fees for every day or part of a day that the container remains on the vessel. These fees are intended to compensate the shipping line for any loss of revenue or additional expenses incurred as a result of the delay.