Demurrage

Demurrage is one of the central commercial concepts in the chartering of ships, and it flows directly from laytime. When a vessel is fixed to carry a cargo, the charter party allows the charterer a certain amount of time (the laytime) to load and discharge, often expressed as a number of days or as a loading and discharging rate in tonnes per day. If the cargo operations are completed within that allowance, nothing further is owed. If they take longer, the charterer has kept the owner's ship working for the charter beyond the bargain, and demurrage becomes payable.

The demurrage rate is a daily sum agreed in the charter party, usually quoted per day and pro rata for part of a day. It is designed to compensate the owner for the vessel being detained in port instead of earning on its next employment. Demurrage typically runs continuously once laytime is exhausted, and the common maxim 'once on demurrage, always on demurrage' means many of the exceptions that pause laytime (such as bad weather or holidays) no longer stop the clock once the ship is on demurrage, unless the charter party expressly says otherwise.

The opposite of demurrage is despatch, a smaller sum the owner may pay back to the charterer as a reward when loading or discharging is finished before laytime expires. Calculating demurrage and despatch requires careful record-keeping: the statement of facts recording each event in port, the notice of readiness that starts laytime, and the laytime statement that reconciles time used against time allowed. Disputes over demurrage are among the most common in shipping, turning on when laytime began, which delays counted and how the charter party's wording is read. For dry-bulk and tanker operators, demurrage is a routine and material part of voyage economics.