Demurrage and Despatch
Demurrage and Despatch are the costs pertaining to cargo operations during the charter with regard to laytime. If cargo operations are completed after expiry of the laytime for which the owners are not responsible, then the charterers are technically liable for damages due to the delay. For such delay beyond the expiry of laytime, the charterers need to pay liquidated damages (demurrage) for each day/part of a day to the owners.
Demurrage is payable only if a Demurrage/Despatch Money Clause is included in the C/P. It is not subject to laytime exceptions and the demurrage rate is normally a daily rate, which at least covers the owner’s cost of keeping the ship in port. It is paid per running day, hence the well-known expression “once on demurrage, always on demurrage”.
However, if cargo operations are completed before expiry of the laytime, a monetary reward, termed despatch or despatch money, is payable by the owners to the charterer. Despatch will be payable only if a Demurrage/Despatch Money Clause is included in the C/P. If a C/P mentions “free despatch”, then owners do not pay any despatch money for the time saved. The daily despatch rate is traditionally half the agreed demurrage rate. If despatch is payable for all time saved, the laytime exclusions are not taken into account after the completion of cargo. If despatch is payable only for working time saved, laytime exclusions must be taken into account.The following media explains about the Expert’s View
The following media explains about the Demurrage and Damage Claims