Demurrage refers to a charge imposed on a charterer for exceeding the agreed time for loading or unloading cargo. It serves as a penalty for tardiness. There are two categories of demurrage: contract demurrage, which is predetermined in the charterer-shipowner contract, and non-contract demurrage, which is mandated by a court. Additionally, demurrage can also encompass a fee for the late return of ocean containers or equipment.
Demurrage is a term used in maritime law to describe the compensation that a charterer must pay to a shipowner for the delay in loading or unloading cargo within the agreed timeframe. There are two types of demurrage: contract demurrage and non-contract demurrage. Contract demurrage is paid by the charterer when the time taken to load or unload the vessel exceeds the agreed duration stated in the contract. For instance, if the charterer agrees to unload a cargo ship within three days but takes five days, they are obligated to pay contract demurrage to the shipowner. On the other hand, non-contract demurrage is not specified in the contract but is imposed by a court. If the charterer fails to unload the cargo ship within the agreed time and the shipowner takes legal action, the court may order the charterer to pay non-contract demurrage as compensation for the detention. Additionally, demurrage can also refer to a fee charged for the late return of ocean containers or other equipment. Overall, demurrage serves as a means for shipowners to recover the time and financial losses incurred due to the charterer’s failure to adhere to the agreed loading or unloading timeframe.
Demurrage is a fee charged by a carrier for the detention of a container or cargo beyond the allotted free time.
Demurrage applies when the consignee or their agent fails to take delivery of the cargo within the agreed-upon free time allowed for pick up.
Demurrage is typically calculated on a daily basis and is based on the size and type of container or cargo, as well as the terms outlined in the shipping contract.
The party responsible for paying demurrage fees is usually outlined in the shipping contract. It is often the consignee or their agent, but can vary depending on the terms of the agreement.
Yes, demurrage fees can be disputed if there are valid reasons for the delay in picking up the cargo, such as carrier-related issues or force majeure events.
If demurrage fees are not paid, the carrier may take legal action to recover the fees, and the cargo may be held until payment is made.
Demurrage fees can sometimes be waived or reduced if there are extenuating circumstances that caused the delay in picking up the cargo.
Demurrage fees are not typically regulated by law, but they are governed by the terms of the shipping contract and industry standards.
Yes, demurrage fees can be included in the shipping contract, and the terms for demurrage should be clearly outlined to avoid disputes.
If you receive a demurrage invoice, review the terms of the shipping contract and the circumstances surrounding the delay in picking up the cargo. If there are valid reasons for disputing the fees, communicate with the carrier and seek legal advice if necessary.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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