Maritime Glossary
Demurrage
A penalty payment owed by the charterer when a vessel is detained in port beyond the agreed laytime.
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Full Definition
Demurrage is liquidated damages payable under a voyage charter when the charterer exceeds the free laytime for loading or discharging. It is expressed as a daily rate (e.g., USD 25,000/day pro-rata). Time counts from laytime expiry until cargo operations complete, subject to agreed exceptions (weather, port holidays, breakdown). Demurrage compensates the owner for lost earning time. Despatch (the converse) is a reward to the charterer for completing operations faster than allowed laytime.
Domain Tags
commercialcharteringlegal