Risk & markets
Demurrage
Money the charterer pays the owner when loading or discharge runs past the agreed laytime.
What is Demurrage in shipping?
A penalty rate, agreed in the charter party, that compensates the shipowner for a vessel being detained at port beyond the free 'laytime' allowed for cargo operations. Its opposite is despatch — a reward paid to the charterer for finishing early. Demurrage is one of the most commonly disputed items in dry-bulk and tanker shipping.
Educational reference only — verify operational guidance with UKMTO, MSCHOA, your flag state, P&I club and legal counsel.
Related terms
- Laytime — The free time allowed under a charter for loading or unloading cargo.
- VLCC / Suezmax / Aframax — Standard crude-tanker size classes, from very large down to medium.
- P&I (Protection & Indemnity) club — A mutual association that covers a shipowner's third-party liabilities.