What does detention or demurrage refer to in transportation?

Detention or demurrage specifically pertains to charges applied when transport vehicles, such as trucks, containers, or rail cars, are kept beyond an agreed-upon timeframe without being loaded or unloaded. This situation often arises in freight transportation when delays occur at terminals or loading docks, impacting the efficiency of the supply chain. These fees serve as a financial incentive for shippers and consignees to manage their time effectively, ensuring that transportation assets are utilized optimally and returned to service as soon as possible.

This concept is crucial for maintaining cost efficiency in logistics, as extended use of freight equipment without productive activity can lead to increased operational costs for carriers. The imposition of these fees underscores the importance of timely operations in the transportation sector.