• Commercial Law

    Commercial Law

    We are business people as much as we are lawyers. We will take care of the legal documents so you can confidently run your business.
    As your business grows, its risk profile and governance challenges will change. We partner with our clients over the long term to ensure they are in the driver’s seat for success.

  • Dispute Resolution

    Dispute Resolution

    We are in your corner when the going gets tough. Having resolved over 6,500 disputes for business owners have seen it all before.

    Whether you need a skilled negotiator or a fearless litigator, we specialise in delivering commercial results when:

    Customers refuse to pay;
    Suppliers let you down; and
    Business Partners do the wrong thing.

  • Employment & Safety

    Employment & Safety

    The biggest challenge for any business owner, is managing their employees.

    A difficult employee can make you question why you got into business in the first place and be toxic to your team morale.

    We deliver proactive solutions to manage your team via employment contracts, policies and procedures as well as handling employment disputes when they arise.

  • Property & Construction

    Property & Construction

    Property is the key most wealth in Australia.  Whether you are buying, selling, leasing or developing property, you need a lawyer you can count on.

    We can advise on the whole property development process from obtaining finance to development approvals, construction and sale or leasing.

    We also act for the Master Builders Victoria and have extensive expertise in construction contracts and disputes.

  • Family Law

    Family Law

    At Taurus Legal Management we understand the unique challenges clients encounter during family disputes, especially when children are involved. Our family lawyers specialise in handling high-asset cases with a focus on protecting clients wealth, securing their family’s future, and safeguarding the best interests of their children.


If your business is involved in container shipping, it’s likely that you have heard of “demurrage” and “detention” charges. This article explains the basics of the two terms, recent observations by the Australian Competition and Consumer Commission, as well as tips on mitigating your exposure to fees, for both new and existing businesses in container shipping.


The party responsible for unloading the shipment (typically, the importer), will have a set period of “free time” (commonly referred to as “laytime”) to take delivery of the container. If the importer fails to take delivery by the last free day, this will then trigger demurrage fees. Generally, the importer will have anywhere between 5 and 20 of laytime to collect the container. Demurrage is charged from the day after the last free day, until the cargo is either loaded onto transport or it has departed (depending on your contract).  Demurrage is a form of liquidated damages to compensate the shipowner or owner of the container yard for holding the container beyond the allotted laytime period.  That said, demurrage may be the only loss or damage claimed by the shipowner or container yard, depending on the breaches and heads of loss set out in your contract.


By contrast, shipping line contracts may also have a separate line item for detention charges, where the importer must collect the container, unload the cargo and return the empty container to the port terminal, for that container to repeat the logistics cycle. If the consignee fails to return the empty container within the laytime period, detention charges (or “ongoing container hire fees”) start to amount.  In Australia, demurrage and detention is commonly a combined term that allows only one laytime period for a container’s time inside and outside of the terminal.

ACCC Report

In December 2022, The Australian Competition and Consumer Commission published a report of its findings following a directive by the Australian Government to monitor prices, costs and profits of container stevedores at international container ports in Adelaide, Brisbane, Fremantle, Melbourne and Sydney (ACCC Report).[1] The ACCC Report cites reasons for recent increases to demurrage and detention charges in Australia, such as: supply chain disruptions; container yard congestion due to COVID-19; and labour shortages (among other reasons). A key finding of the Report is that cargo owners in Australia need more protection against unreasonable detention fee practices, and this sentiment has been echoed by cargo owners throughout Australia.

Incoterms and Sale of Goods Contracts

A sale of goods contract between a seller and a buyer will bring about the need for a form of delivery. That contract will typically stipulate a three-letter abbreviation which dictates agreed rules for the delivery of the goods, known as “Incoterms” (International Commercial Terms) which are published by the International Chamber of Commerce. It is crucial that you understand the different Incoterms, and the version that applies; whether it be Incoterms 2010 or Incoterms 2020.

A sale of goods contract can be utilised to pass through liability for shipping line charges from one party to the county party. It is important that contract terms are clear and fair, as carefully drafted terms can deflect liability for shipping line charges.

Key Takeaways

Demurrage and detention charges can add up quickly and amount to a significant expense. This highlights the importance of having clear contract terms, both in the contract between the seller and the buyer, as well as the contract between the consignee and the shipowner or container yard owner.

Here are a few brief tips to keep in mind to mitigate demurrage and detention charges:

  1. Be proactive and organised;
  2. Use technology to your advantage – an efficient freight management system can help you tick item 1; and
  3. Seek advice from a broker or freight forwarder or a customs agent;
  4. Carefully consider the terms of the sale of goods contract, with a focus on:
    • The effect of the Incoterm (where applicable).
    • Risk allocation between the buyer and seller for charges payable to the owner of the shipping line or container yard.
    • Limitations on liability.

If you would like assistance with drafting or negotiating a contract concerning demurrage or detention charges or Incoterms, please contact one of our expert commercial lawyers at Taurus Legal Management on (03) 9481 2000 or info@tauruslawyers.com.au.

[1] https://www.accc.gov.au/system/files/Container%20stevedoring%20monitoring%20report%202021-22.pdf

Posted by Taurus Legal Management