Demurrage
A daily penalty the charterer pays the owner for using more than the agreed laytime to load or discharge.
- Category
- Cargo and Operations
- Dictionary entry
- Demurrage
- Last reviewed
How it works
Demurrage is liquidated damages paid by the charterer to the owner when cargo operations run beyond the allowed laytime. It is set as a daily rate in the charter party and runs continuously once laytime is exhausted; the principle "once on demurrage, always on demurrage" means many laytime exceptions stop applying.
Demurrage is one of the most common sources of post-fixture dispute, hinging on whether laytime was correctly counted and whether delays fall on owner or charterer.
Where it shows up on The Maritime
Also known as: demurrage rate, on demurrage.
The short dictionary definition is at Dictionary entry: Demurrage. This page is the explainer.
Related terms
Laytime
The time allowed under the charter party for the charterer to load and discharge the cargo without extra payment.
Despatch
A payment back to the charterer for completing cargo operations in less than the allowed laytime: the mirror of demurrage.
Notice of Readiness (NOR)
The formal notice that a ship has arrived and is ready to load or discharge, which starts the laytime clock.
Charter Party (C/P)
The contract between shipowner and charterer setting out the terms of hiring a vessel or carrying a cargo.
More cargo and operations terms
A plain-English reference definition: our own explanation of a standard shipping concept, not a licensed source or legal advice. See the full glossary or the broader maritime dictionary.
Last reviewed: .