Back to glossaryTransport

Demurrage

The agreed sum owed to the carrier when the time allowed for loading or discharging is exceeded, now a major cost line in container trades.

Definition

Demurrage is the sum a charterer owes the owner when it exceeds laytime, the period agreed for loading or discharging the ship. In law it is not a penalty but liquidated damages agreed in advance, which relieves the owner of proving loss and bars the charterer from arguing the amount, unless it shows the delay came from the owner's own act. The count runs from the notice of readiness and follows calculation rules whose fine detail feeds a large share of maritime arbitration: working days, waiting time at anchorage, weather exceptions. Containerization moved the word toward a neighboring but distinct reality, the charges billed to a shipper that keeps a box too long inside or outside the terminal, which commercial usage happily conflates. The problem solved is that of an asset whose cost is essentially fixed and whose every idle day is lost for good.

Example

Demurrage and detention charges billed in American ports reached about 2.2 billion dollars in 2021 alone according to figures compiled by Container xChange, during the West Coast congestion. Congress answered with the Ocean Shipping Reform Act signed on June 16, 2022, which requires the carrier to justify every invoice and opened the first Federal Maritime Commission proceedings.

Related terms
Also known as

staries et surestaries, frais de stationnement