Are you overpaying for your ocean freight?

It should be on the agenda of your monthly review, and if you put it there, the odds are nobody in the room can answer it. For most businesses that import or export, the honest answer is not yes and not no. It is "we don't know." They cannot say whether their rate is high or low for the lane, and they cannot say whether what they pay has any real connection to the service they get back. That uncertainty, more than the rate itself, is the problem.

Look at how the typical renewal goes. The team goes in asking for roughly the same as last year. The carrier comes back with an increase. There is no independent read on whether the number is fair and no clear picture of the performance behind it, so the business accepts it, because the alternative feels like no service at all. Nobody in the room can say with confidence whether it is a good deal. That is an uncomfortable way to run your largest freight commitment, and it is far more common than people admit.

None of this means you are doing a bad job. Almost no business has its freight rates, service performance, free days and invoices in one place where they can be read against each other. The data exists inside the business. It is just scattered, so the question goes unanswered. This piece is about making the question answerable, because "we don't know" is not a good enough answer for a number this size.

How do I check whether I am overpaying on ocean freight?

You cannot answer it from gut feel. You answer it with three checks, and each one is a place money quietly leaks.

First, check your rate against the market, not against last year. Carriers price every shipper individually, so two businesses moving similar volumes on the same lane can pay very different rates. Compare what you pay on your busiest lanes with current market rates. A deal signed in a tight market can sit above the market within six months, and most shippers only find out at the next tender. Freight benchmarking guidance makes the same point: without continuous comparison, you are working from a snapshot that is already stale.

Second, check whether the service matches the spend. You might be paying a higher rate for priority loading and no-roll guarantees, then getting rolled anyway. You might be on a cheaper rate and quietly absorbing late arrivals through extra safety stock and unplanned air freight. Put your rate next to your on-time performance and rolled-cargo rate for the same lane. Paying more is only a problem if you are not getting more.

Third, check your demurrage and detention. Do your free days match how long containers actually take to clear and return, and are the charges you paid even correct? The sections below break both down.

How many free days should I have on an ocean freight contract?

Standard terms give shippers roughly 3 to 7 free days for demurrage and 5 to 7 free days for detention, according to freight industry guidance. High-volume shippers can negotiate far more. It is common for large shippers to secure 14 to 21 free days as part of an annual service contract, especially on lanes prone to port congestion or difficult inland delivery.

This matters because free days are one of the most under-negotiated terms in an ocean contract. If your team is booking against 4 free days on a lane where your containers routinely take 9 days to clear and unpack, you have effectively agreed to pay demurrage on every shipment before the season even starts. The fix is not operational heroics. It is negotiating free days that match how long your product actually takes to land and return, which is a number your own shipment history already contains.

What does demurrage and detention actually cost?

In 2025, demurrage runs roughly $150 to $300 per container per day and detention around $100 to $250 per day, per freight cost guides. At a congested hub like Los Angeles or New York, a single container held for two weeks can rack up more than $2,500 in charges.

Across the industry the numbers are enormous. The US Federal Maritime Commission reported that nine major carriers collected $15.4 billion in detention and demurrage fees between April 2020 and March 2025. For an individual business, D&D shows up as a recurring tax on delays, and it is often the line nobody owns, because the charges arrive weeks after the container moved, long after anyone could have prevented them.

Can demurrage and detention charges be disputed or recovered?

Yes, and more of them than most teams assume. Two things drive avoidable D&D spend: charges that should have been prevented, and charges that were billed incorrectly in the first place.

On the billing side, the FMC's demurrage and detention billing rule requires carriers to include specific information on every invoice and to issue it within a set window. If a required field is missing, the billed party's obligation to pay can be eliminated. In one documented case, a carrier reissued a corrected invoice for about 40 percent less after an importer challenged a missing free-time date.

Billing errors are not rare. Freight invoice audits typically surface 5 to 10 percent billing errors across ocean charges. One logistics team cut its demurrage and detention costs by 24 percent through invoice validation alone. The money is recoverable. What stops most teams is that verifying a D&D charge means cross-checking free-time terms, gate-out timestamps, and container availability, and that data usually lives in three different systems that do not talk to each other.

Why most businesses cannot tell if the deal is good

This is not carelessness, it is fragmentation. Your rate sits in a contract, the service you received sits in carrier scorecards, your free days sit in a rate sheet, your D&D charges sit in invoices, and your real transit times sit in shipment records nobody has pulled together. So you negotiate blind. Your carrier walks into the renewal with detailed data on your account while you walk in with last year's spreadsheet, which is why the same ask comes up year after year and the price only moves one way.

Connect that data and the picture changes. When your contract terms, lane performance, service usage and invoice history sit in one workspace, you can see where the service you paid for went undelivered, where free days no longer match reality, and which D&D charges never should have been paid. Your carriers already negotiate with very good data. This is how you negotiate with it too. The same lane-level history has a second use: when it shows transit on a key route stretching from, say, 30 days to 45, it is the evidence your finance team needs to push supplier payment terms out so cash leaves the business closer to when product actually lands.

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