All terms

Shipping & logisticsdemurrage

Demurrage

The penalty paid by the charterer when loading/discharging takes longer than allowed laytime.

Demurrage is the penalty the charterer pays to the shipowner when loading or discharging exceeds the allowed laytime. Rates are agreed in the charterparty (typically USD/day).

Demurrage costs flow through the SPA back to buyer or seller depending on who holds the vessel risk in the delivery basis (FOB = buyer, CFR/CIF = seller).

Related: Laytime, Charterparty.

Frequently asked

What does Demurrage mean in oil and commodity trading?
The penalty paid by the charterer when loading/discharging takes longer than allowed laytime.
How do I check a counterparty that uses Demurrage in a deal?
The term itself is not enough to clear or condemn a deal. What matters is the counterparty behind the pitch. Screen that name for free against 8 sanctions lists plus PEP and OilFlow's first-party cluster corpus in seconds, or order the full 7-step dossier for $25, and confirm identity documents and banking details independently before you transact.

See also

laytimecharterparty

Seen this term in a live pitch?

These terms show up in real deal pitches — some legitimate, some not. OilFlow screens the counterparty behind the pitch against 8 sanctions lists + PEP and a first-party-investigated fraud-cluster corpus, with a clearance verdict in under 30 seconds.