demurrage


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Demurrage

A separate freight charge, in addition to ordinary shipping costs, which is imposed according to the terms of a carriage contract upon the person responsible for unreasonable delays in loading or unloading cargo. In maritime law, demurrage is the amount identified in a charter contract as damages payable to a shipowner as compensation for the detention of a ship beyond the time specified by a charter party for loading and unloading or for sailing.

Demurrage is intended to serve the public interest by facilitating the flow of commerce through the prompt loading and unloading of cargo. In general, the person liable for demurrage is the one who assumed the duty to unload or load the cargo but failed to fulfill it. A consignee who agrees to unload a shipment but unreasonably delays in doing so is liable for the charge.

Payment of demurrage is excused only if the delay was unavoidable, such as a delay caused by a natural disaster or the fault of the carrier. Reciprocal demurrage may be imposed upon a carrier who unreasonably delays in providing transportation to customers. The practical effect of reciprocal demurrage is a reduction in the customer's shipping charges unless the contractual amount exceeds that figure. If a person against whom demurrage is imposed fails to pay, the carrier might have a right to keep the goods until payment is made. This is known as demurrage lien, enforceable only if authorized by statute, contract, or custom.

Cross-references

Shipping Law.

demurrage

noun compensation for delay, payment for delay, penalty for delay, remittance for delay

demurrage

a sum of damages agreed in the contract of charterparty in the event of the charterer delaying, to be paid to the shipowner.

DEMURRAGE, mar. law. The freighter of a ship is bound not to detain it, beyond the stipulated or usual time, to load, or to deliver the cargo, or to sail. The extra days beyond the lay days (being the days allowed to load and unload the cargo), are called the days of demurrage; and that term is likewise applied to the payment for such delay, and it may become due, either by the ship's detention, for the purpose of loading or unloading the cargo, either before, or during, or after the voyage, or in waiting for convoy. 3 Kent, Com. 159; 2 Marsh, 721; Abbott on Ship. 192 5 Com. Dig. 94, n., 505; 4 Taunt. 54, 55; 3 Chit. Com. Law, 426; Harr. Dig. Ship and Shipping, VII.

References in periodicals archive ?
According to the conditions mentioned in the Bill of Lading, the consignee shall be responsible for the payment of the demurrage to the carrier once he delivers the Delivery Order to the carrier/ carrier's agents.
For those improvements, as well as producing a 25% reduction in annual expediting freight charges in its West Coast operations as well as a 50% reduction in daily demurrage charges, VWR has been named the 2016 NASSTRAC Shipper of the Year, an award given annually by the association and Logistics Management to a shipper that has transformed operations through the implementation of best practices and innovative thinking.
The MCB ensured that trucks were fully utilized before releasing them for movement, expedited shipments on regular-priced forms of transportation, and reduced demurrage associated with truck-loading times.
Wahid Ahmadzai, the head of Ahmadzai Hashemi Company, said demurrage has "swallowed" up all his profits.
The move has irked some in the finance ministry, an official said, noting that the ministry had opposed the proposal to write off the demurrage charges.
The Korean vehicles, which were imported by Afghan traders, are priced less than their demurrage charges and other expenses, so the traders decided to leave their vehicles to Pakistani officials, he said.
She successfully reduced the Houston facility's rail demurrage by 80 percent and generated revenue by optimizing rail storage capabilities.
In an effort to add value to customers operations in 2001 the company opened a demurrage department, handling claims for vessel owners, charterers and receivers alike which has been most successful with our principals.
However, the commercial terms for each deal, including prices, demurrage and additional services, will be negotiated separately.
Gary Bristow, a total preventative maintenance specialist who has worked for Goodyear Dunlop for 25 years, created a significant amount of new floor space within the firm's Wolverhampton factory, saving pounds 100,000 every month in warehousing and demurrage costs.
Iraq did not off load the wheat and ship remained anchored in ship yard for 58 days and government of Pakistan had to pay demurrage for 37 days, committee was further told.
This reduces lead times and eliminates quay rent and demurrage costs.