Demurrage Clause

The Demurrage Clause is a common provision in foreign trade transport contracts, especially charter parties or bills of lading, stipulating that the charterer must pay demurrage to the shipowner if loading or unloading operations are not completed within the agreed time. It is mainly used in bulk commodity shipping (e.g., coal, grain, ore) and in cases of delays caused by low port handling efficiency or uncontrollable factors such as weather. Key points include: specifying the demurrage rate (usually per day), the commencement time (e.g., after tender of Notice of Readiness), the agreed laytime, and whether reciprocal provisions for demurrage and despatch money are included. This clause is the counterpart of the Despatch Money Clause: the former is a penalty, the latter a reward. Unlike demurrage, detention usually refers to container overstay charges rather than vessel delay. Foreign trade practitioners should clearly stipulate the calculation method, responsible party, and exempting circumstances in the contract to avoid disputes.