Demurrage

Demurrage is the agreed compensation a charterer pays to a shipowner when loading or discharging takes longer than the laytime allowed in the charterparty. It is usually expressed as a daily rate (e.g. US$25,000 per day, pro rata) and is treated as liquidated damages for the delay, not as freight.

Once a vessel is “on demurrage”, most charterparty exceptions stop applying — hence the traditional maxim “once on demurrage, always on demurrage”: weekends, holidays, and weather interruptions that would normally pause laytime generally do not stop the demurrage clock.

The opposite concept is despatch (or dispatch): a reward, typically at half the demurrage rate, paid by the owner to the charterer if the port operations are completed faster than the allowed laytime. Despatch is common in dry bulk trades but rare in tanker chartering.

Demurrage claims are a major source of disputes in commodity trading, and many trading houses employ dedicated demurrage analysts to calculate and negotiate them.