On a coconut shipment, the party that pays demurrage and detention is the party that controls the container when the free time runs out. The contract rarely says so. Under CIF or CFR the seller pays freight to the destination port, but the buyer usually carries every day after discharge, and the bill of lading is what the carrier enforces.
That gap is where cost leaks. A late phytosanitary certificate or a stuck letter of credit document set can park a 40ft box in the yard for a week. At the Singapore tariff quoted below, a 40ft held twelve days costs about SGD 1,100 in charges nobody budgeted.
This post sets out what the two charges are, how free time is counted, who the carrier will bill, and which contract terms cap the exposure.
What are demurrage and detention?
Demurrage is the charge for a container sitting inside the port or terminal after the free period. Detention is the charge for holding the carrier’s equipment outside the terminal, from gate-out until the empty comes back to the depot. DHL’s freight forwarding guide describes the same split and notes that amounts vary by location, carrier and container type.
Many carriers now run a combined clock. Maersk’s published terms offer combined demurrage and detention, demurrage only, and detention only. In the combined case, free time is one pool that starts at discharge and ends when the empty is gated back in.
Storage is a third charge. Terminal storage and store rent sit outside the carrier’s tariff and are billed separately.
How is free time counted?
Free time is counted in calendar days from discharge, and weekends and public holidays use it up. One example: the ONE import tariff for Singapore, effective 1 April 2024, gives 3 calendar days on dry and general reefer boxes. Charges then start at SGD 40 a day for a 20ft and SGD 75 for a 40ft, rising to SGD 90 and SGD 180 from day 9.
Those are one carrier’s figures for one port at one date. Treat them as an illustration of the shape, not a benchmark for your lane.
| Day after discharge | 20ft per day (SGD) | 40ft per day (SGD) |
|---|---|---|
| 1 to 3 | Free | Free |
| 4 to 8 | 40 | 75 |
| 9 onward | 90 | 180 |
Read the table against a coconut programme. A 40ft that clears customs on day 12 has five days at 75 and four at 180 once the free days are gone. The arithmetic is simple and still surprises buyers who assumed a week of grace.
Who does the carrier bill?
The carrier bills whoever the bill of lading names as consignee or notify party, regardless of what the sale contract says. The commercial split between buyer and seller is a separate matter, settled afterwards.
In the United States the billing question is currently unsettled. The Federal Maritime Commission’s 2024 rule took effect on 28 May 2024 and set invoice content and a 30-day issuing deadline. The D.C. Circuit vacated the section on who may be billed on 23 September 2025, per Holland & Knight, while the invoice-content and deadline parts remain in force, as the FMC’s own notice states. A charge invoiced late or without the required content is not payable.
That rule applies to US trade only. For Singapore, EU and GCC destinations, the tariff and the bill of lading remain the working documents.
Which incoterm puts the risk where?
No incoterm allocates demurrage at destination to the seller unless the contract adds it. The table below shows the default for the three terms coconut buyers use most, and the incoterms comparison covers the cost split in more detail.
| Incoterm | Seller’s freight duty | Who normally carries destination D&D |
|---|---|---|
| FOB | None after loading | Buyer |
| CIF / CFR | Freight to destination port | Buyer, after discharge |
| DDP | Freight, duty and delivery | Seller, until delivery |
Under DDP the seller carries the clock, which is why DDP quotes for coconut ingredients should state the free days assumed. Under CIF, a seller who books the freight also picks the carrier and the free time, so the buyer inherits terms it never saw. Ask for the carrier’s free-time line before the booking is confirmed.
What actually delays a coconut container?
Documents cause more late clearances than ships do. A phytosanitary certificate with the wrong consignee name, a certificate of analysis that does not match the spec in the letter of credit, or a missing fumigation record each stops release. The import document pack lists what customs and the carrier expect. A letter of credit with discrepancies holds the original bills and so holds the cargo; the LC discrepancies post covers the usual ones.
Inspection holds are the second cause. A container selected for examination, or one rejected on arrival, keeps the clock running while the dispute sits. The rejected-container claims playbook sets out the steps that stop the days stacking up.
Empty return is the third. A depot closed on a public holiday cannot take the box back, and under a combined clock that day is charged.
What this means for buyers
- Procurement managers (A): put a free-days figure and a per-day ceiling in the purchase order. A free-time number agreed before booking is cheap; one argued after discharge is not.
- Importers (B): book a customs broker and a trucker before the vessel arrives. Pre-lodge documents so release is possible on day one.
- Brand owners (C): if you buy CIF through a trader, ask which carrier tariff applies and whether the clock is combined.
- Traders and brokers (D): price a D&D allowance into DDP quotes and write the free days into the offer, so a delay is a change of terms rather than a loss.
FAQ
Who pays demurrage on a CIF coconut shipment? Normally the buyer, from discharge. The seller’s duty ends at paying freight to the destination port. The contract can shift this, but only if it says so in writing.
Is detention the same as demurrage? No. Demurrage is the charge while the box is in the terminal. Detention is the charge while it is outside, until the empty returns. A combined tariff merges them into one clock.
Can the charge be disputed? Yes, if the invoice is wrong, late or lacks required content, or if the carrier caused the delay. Keep gate and release timestamps, and raise the dispute in writing within the tariff’s window.
How many free days should a buyer ask for? Ask for the longest the carrier will give on the lane, and name the figure in the order. Tariff free time is often short, so extended free days are usually negotiated.
Need free time and a D&D ceiling written into a coconut contract? Send the desk an RFQ.