Maritime Law Practice Exam

Demurrage is the fee payable to the shipowner when the vessel is delayed beyond the agreed period for loading or unloading, known as laytime. In a voyage charter, the charter party fixes laytime and the rate of demurrage. If loading or unloading runs past this laytime because of delays caused by the charterer, demurrage accrues to compensate the owner for the time the ship is tied up and not earning its hire. If the operations are completed within laytime, a despatch payment might be due to the charterer, instead of demurrage. This is not a fee to port authorities, not the initial hire, and not the cost of fuel. For example, if laytime is five days and loading takes six days, one day of demurrage would be payable at the agreed rate.