What is Demurrage?

The word “demurrage” is derived from the Old French verb demeurer, which means to linger. The phrase, which has its roots in vessel chartering, describes the time a charterer retains control of a vessel after the usual laytime during which cargo can be loaded and unloaded.

Demurrage is the amount of laytime used less the agreed-upon amount of laytime. If the length of the laytime exceeds the amount of time agreed upon, demurrage is charged.

What is Laytime?

The time allotted in a trip charter for the operation of loading and unloading the cargo is known as laytime. The master and crew are the shipowner’s workers, not the charterer’s, and they are in charge of running the ship under a voyage charter.

What differentiates lay days from lay time?

Lay days and lay time are two words used in the shipping industry that are frequently used interchangeably. There is a significant difference between the two names, even though they both refer to the same issue—the amount of time required to load and discharge the cargo.

“Laydays”

The days set aside in a ship’s voyage itinerary for loading and unloading cargo are known as laydays. Laydays are the deadlines by which a ship must arrive at the charterer in order to begin cargo operations.

Laydays are chosen based on the kind and volume of cargo. A number of laydays may be required for larger loads, as specified in the shipping contract. A particular ship is expected to pay a penalty or fine if it is unable to reach the charterer within the specified laydays.

Laydays are always planned in advance to ensure that all necessary tasks are completed within the allotted period. There are various methods to define laydays, including:

1.Days that are run in succession, including weekends and holidays

2.Working days – Consecutive days that do not include weekends or holidays

3.Weather-permitted days for cargo loading and unloading are referred to as “weather working days.”

“Lay time”

The length of time allotted to a ship under a voyage charter for cargo loading and unloading at a port is known as laytime. A demurrage (fine) is incurred to the ship owner if a ship does not finish the job within the given time and must remain in port for an extended period of time.

As the charterer wants to utilise the ship for a longer period than planned, the fine is frequently paid by the charterer to the ship owner. The ship owner might need to pay the charterer, though, if the charterer only needs the specified lay time. The charter party in charge of the entire procedure has already established these phrases.

Additionally, port authorities can set a lay time limit and impose fees on ships that go above that time limit.