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

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 documents available with The Express Tribune, importers have lodged a complaint with FIA Karachi Corporate Circle that Maersk shipping service, its subsidiary Maersk Pakistan (Private) Limited and Qasim International Container Terminal (QICT) were demanding higher demurrage and detention charges by holding off clearance of their imported goods.
"Obviously, there are a lot of issues, concerns and underlying causes that have caused problems and expense with demurrage charges."
As a result, Lifestyle was granted an allowed administrative priority claim for the purchase price of the goods and the demurrage charges.
He said: 'Many containers have been abandoned in Apapa because of high tariffs and demurrage from Shipping companies and terminal operators.
class="MsoNormalImporters are allowed up to four days to clear goods from the port, beyond which one begins to be penalised via demurrage charges.
The investigation found that demurrage and detention charges can incentivize cargo to move expeditiously and that standardizing practices for when these fees are levied would improve velocity at ports.
"Besides guaranteeing the security of supply of petroleum products, the new tanks have also enhanced operational flexibility and increased tank turnaround at Kipevu, Mombasa, resulting in more ullage creation and significant reduction of demurrage charges."
In a briefing to the committee on Thursday, PSO Managing Director Jahangir Ali Shah said demurrage cost as a percentage of imports made by the company rose to 0.48% in 2017-18 from 0.3% in 2013-14.
Similarly, one of the importers recently had to pay $80,000 as demurrage for chemical imports.
Labour disputes on the West Coast of the United States, chassis shortages, and carrier insolvencies have all been contributing factors to port congestion causing many shippers, including coffee merchants, to experience very expensive unfair demurrage and detention charges.
This, according to Lacson, is called "demurrage'' which Webster says it is ''the payment made to the ship owner by the charterer for exceeding the time allowed for loading and unloading.''
OCAC argued that the contradiction led to delay in the discharge of cargo from anchored vessels and importers were forced to pay unnecessary demurrage charges.