Demurrage FAQ

1 – What is Demurrage?

Demurrage is a term used in the maritime shipping industry that refers to the delays shipping companies take when unloading containers from the ship to the terminal yard in ports.  They have a certain number of days to do this, and if they exceed this, they are liable to pay fees.

2 - Why is it important to know about demurrage?

Demurrage affects everyone in the logistic and shipping industry, particularly importers.  If there are delays in the operation all the demurrage fees will be incorporated into your final bill!  So you need to be aware of this risk and how much it could cost you.  The ports will bill the fee to the shipowner, who will bill it to the shipping company, who will then pass it on to the importer!

So, basically, there are 3 things the importer should do:

  • Have full awareness of demurrage and how it works.

  • Ensure their part of the logistic operation will work smoothly, e.g. the trucks that will pick up the cargo at the port yard are there on time.

  • Ideally, demand that your shipping company only use containers monitored with trackable systems - like SENSEFINITY solutions :)

3 - What kind of Demurrage delays exist?

If the delay is a result of too much time unloading cargo from the ship to the terminal,  then the shipowner is responsible for the delay and must pay a fee.

If the cargo is unloaded from the ship, but the importer fails to remove it from the terminal (e.g. the cargo is not loaded into a truck and remains in the terminal), then the importer is responsible for the delay and will pay the fee).

4 - How is the Demurrage fee calculated?

The fee depends on the port fee rate, the number of delayed days, the number of containers, and the currency of the port country.

5 - What are demurrage exceptions?

If the delay is due to external factors, such as bad weather or strikes, fees will be waived.

6 - How can I prevent Demurrage fees?

It’s always good practice to know where your containers are - whether they are being loaded, unloaded, or just ‘’lost’’.  Usually, logistic problems are a result of overlooking items, or visibility problems.

Want to know more about visibility for logistics and supply chain?  Then please visit sensefinity.com/demurrage