Table of Contents
What does demurrage mean?
/dɪˈmʌrɪdʒ/ us. money that has to be paid when a chartered (= rented) ship is used for longer than agreed, or when goods are collected later than the agreed time after being taken off a chartered ship. (Definition of demurrage from the Cambridge Business English Dictionary © Cambridge University Press)
What is the purpose of demurrage?
Demurrage (pronounced \di-ˈmər-ij\), detention & storage charges were originally introduced as a fair compensation to equipment and facility owners for the usage of said equipment and facilities – think containers, container yards, freight stations and warehouses.
Do I have to pay demurrage?
In most cases, the consignee, or receiving party, must pay a demurrage fee when goods sit too long in the terminal. If the consignee takes too long, it may face a penalty. After all, someone’s got to pay for that work. Each bill of lading should clearly explain demurrage charges.
What is demurrage in accounting?
In the context of currencies and commodities, demurrage refers to the various costs of owning the currency or commodity in question. For example, currency holders may need to pay account fees, whereas holders of commodities such as gold and silver may need to pay insurance and storage fees as well.
What is demurrage and detention?
Demurrage refers to the charge that the merchant pays for the use of the container within the terminal beyond the free time period. Detention refers to the charge that the merchant pays for the use of the container outside of the terminal or depot, beyond the free time period.
How is demurrage calculated?
How are demurrage charges calculated? In the calculation of Demurrage charges to the shipowner/port authority, the demurrage rate is multiplied by the number of days/part days over the agreed free days.
How much is demurrage charges in India?
Demurrage charges will be levied from 25.8. 2009 onwards on the cargoes lying beyond 30 days at four times the highest existing demurrage i.e. Rs. 75.00 per tonne per day or part thereof charged under Section 3.1(B) Chapter III of Scale of Rates working to Rs. 300.00 per tonne per day or part thereof.
What type of account is demurrage?
Answer: Demurrage and penalties are abnormal cost and are not part of the material cost. It is charged to Profit & Loss Account.
What is a demurrage in business?
When a chartered ship fails to load or unload its cargo in the timeframe set out in its contract, it may owe the owner of the vessel a penalty fee known as a demurrage.
What is demurrage for business?
Demurrage is the recovery of costs incurred for delay of the container within the port, charged by the shipping company or the party that has leased the container. Container leasing is a booming 5.5 billion Dollar industry that leases cargo containers to their customers and manages a fleet of containers for them.
What does demurrage charges mean?
“Demurrage is a charge levied by the shipping line to the importer in cases where they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days.”. Demurrage charges can vary country to country as well as by carrier.
Definition: Demurrage & Detention. Per definition, Demurrage & Detention are a matter of allowed free-days, determining the number of days a shipper can use the container for free.
What is a detention charge?
Detention is a charge that a carrier will assess if the time that was allotted to pick up a freight load or to drop it off is exceeded. This means that the carrier is not actually moving like they should be and may be made late for other pickups or drop-offs along the route.