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 ?
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.
I think in the past year I've probably paid $2 million in demurrage and other fees .
These expenses usually include destruction fees or auction, demurrage, port storage and reefer plugin fees.
He said that the losses in the wake of demurrages and detention charges are not countable but the figure is definitely in billions of rupees.
The railcar sits at your facility longer than you agreed upon with the supplier, so he back charges you demurrage.
Faraj said the State Oil Marketing Organisation (SOMO) was expected to defer 20m barrels from December nominations to January, which will force Iraq to pay high demurrage bills.
Faraj said Iraq had to pay oil companies a high bill of demurrage due to crude oil loading delays, explaining: "Because of the delays in supplying the amount of crude oil required during the last three months of this year, we have to pay our customers between $20m [and] $30m".
While demurrage charges aren't necessarily high, they do play a factor in how quickly the barges are loaded.
In addition, because laboratory tests for LMOs generally require a five-to-seven-day turnaround, and because each day a ship waits to unload in port costs approximately $30,000 in demurrage, additional testing would add millions of dollars to the cost of shipping bulk agricultural commodities.
The end result--spoilage of millions of dollars of food, millions of dollars in charges to us in detention and demurrage, inefficient use of strategic lift, and MOST importantly, loss of credibility with our warfighters.
Accordingly, certain shipping concepts which were standard in other trades, such as demurrage, were sometimes not expressly addressed as they were deemed not appropriate.
Growers and elevators also are eligible for Aventis payments for documented StarLink costs or losses such as transportation, storage, testing, demurrage -- extra costs resulting from handling StarLink -- and loss of value.