Demurrage and detention
In bulk shipping, demurrage is the daily compensation the charterer pays the shipowner when laytime is exceeded (e.g. USD 15,000 per day). In container shipping, demurrage is charged by the line when a full container stays in the terminal beyond its free time, and detention when the container is kept outside the terminal – at the buyer’s warehouse – beyond its free time. Customs delays inflate these costs quickly, so free days should be settled when negotiating freight.
Related terms
Laytime
The time agreed in the contract during which the charterer or buyer may use the ship to load or discharge without paying extra. It is usually stated as a daily rate, e.g. “5,000 mt per day SHINC” (Sundays and holidays included) or “SHEX” (excluded). Laytime starts after the Notice of Readiness (NOR) is tendered and any agreed turn time has passed. If it is exceeded demurrage is due; if cargo work finishes early, despatch may be earned where agreed.
Charter party (C/P) C/P
The contract between a shipowner and a charterer governing the use of a ship. Under a voyage charter a specific cargo is carried between named ports at a freight per tonne; under a time charter the ship is hired for a period at a daily rate; under a bareboat charter it is leased without crew. Standard forms include GENCON, NYPE and ASBATANKVOY. Bulk sales contracts should be drafted so that loading rates and demurrage terms are back-to-back with the charter party.
Container types (20’, 40’, 40’HC, reefer, open top)
A 20-foot container (about 33 m³, payload around 25–28 t) suits heavy, dense cargo such as metals, minerals and bagged chemicals; a 40-foot (67 m³) and 40-foot high cube (40’HC, 76 m³, ~26 t) suit light but bulky goods such as plastic granules, fibres and foam. In practice road weight limits are often more restrictive than container capacity. Reefers are used for the cold chain, open-tops and flat racks for machinery and oversized items, and tank containers for liquids.
Explained in the trade handbook
More in Shipping & logistics
- Big bag (FIBC – flexible intermediate bulk container)
- Bill of lading (B/L) (B/L)
- Bulk cargo (dry and liquid bulk)
- Bunker adjustment factor (BAF)
- Cargo insurance (marine cargo insurance)
- Draft survey
- Flexitank
- Freight (freight rate)
- Freight forwarder
- Full container load (FCL) and less than container load (LCL)
- General average (GA)
- Institute Cargo Clauses (A), (B), (C) (ICC (A)(B)(C))