What is Demurrage?

 

The word “demurrage” originated from the French word “demeurer” which means, “to stay”.

 

It is used to describe the time a ships, barges, rail cars, road tankers etc. exceeds the time allowed for loading or discharge operations. By extension, it is an allowance that is applied for delaying the ships over and above the time in the contract. It is not a real penalty, in legal perspective as that infers some wrong doings it is an agreed remedy to compensate the owner when cargo operations take longer than contractually agreed and so the basis of its calculation must be stipulated.

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This high level introduction gives you a flavor for the key elements. If you want to discuss further please send an email.

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Demurrage Introduction