Demurrage

Demurrage is liquidated damages a charterer owes the shipowner for detaining the vessel beyond the agreed laytime for loading or discharging under a voyage charter. The daily or pro-rata rate is fixed in the charter party, so demurrage is not a penalty and does not require proof of actual loss. Time on demurrage usually runs continuously, including periods that would have interrupted laytime, under the principle once on demurrage, always on demurrage. The mirror payment, despatch, rewards the charterer for completing cargo work before laytime expires, customarily at half the demurrage rate.