Five Easy Steps to Avoid Demurrage

The word demurrage comes from the French word demur meaning delay. In the shipping Industry it is a dirty word that often means negotiating responsibility for unexpected costs. Demurrage refers to the detention of a ship beyond the time allowed for loading, sailing and unloading. These delays can be the results of any number of variables, i.e. inclement weather, port obstructions, destination changes etc. Virtually every voyage involves some sort of delay - the trick is to ensure that you do not pay for it. When demurrage does occur, it is best to react so it does not impact your bottom line. Speak to a SPI Marine broker about how to handle, what is often, a very frustrating situation.

  1. Choose the Right Vessel

    Beyond the obvious step of making sure you have a safe and regulatory compliant vessel, also choose a vessel that is capable of performing to the full extent of the charter party. A safe vessel that takes 36 hours to discharge a cargo that any other ship would easily unload in 24 hours is creating 12 hours of demurrage. Ultimately, your receiver will issue you, as charterer, a bill for the 12 hours that its next vessel waited at anchor after commencement of lay days. Eventually, you will issue the same bill to your ship to make you whole. The entire process can take months and often may never be resolved. In the end, it makes more sense to charter the right vessel in the first place. SPI Marines can help you in selecting the appropriate ship for your needs.

  2. The Three Most Important Things in Demurrage: Documentation, Documentation and Documentation…

    If demurrage occurs - and it will - the only question left to be answered will be, "Who pays?" Don't let it be you. Protect your interests and document everything related to the vessel's performance and time log in a vigorous manner. The party with the better records always wins - and not necessarily because what is written in the log is actually what happened. Document, document, document. Talk to your SPI Marine broker to see how.

  3. Doing Your Homework Up Front

    Even the best vessel, performing at peak efficiency, might not be able to measure up to the expectations of a poorly written charter party agreement. Standard forms can be altered, and usually are, in advance of any fixture. Prepare for all eventualities - changes of cargo destination, the selling of the cargo en route, port and labor problems at the load or discharge ports, etc. - by documenting every step from the outset. SPI Marine has standard operating procedures to ensure that your fixture is properly documented from beginning to end.

  4. Load & Discharge Port Representation

    Dispatching an aggressive cargo superintendent or a particularly sharp ship's agent may well be the smartest money you spend when shipping a multi-million dollar cargo. This representative becomes your personal expeditor, advocate and surveyor with your interests in mind. They become your eyes on the ground to get the real story on why things might not be going right and can make all the difference in dealing with demurrage costs. SPI Marines can point you in the right direction to find a cost-effective and efficient marine professional.

  5. Know Your Suppliers & Receivers - Maximize Your Chances for Success

    Ensure receivers are well set up to receive your cargo in an expeditious manner to reduce down time and delays. Don't wait until arrival at the load or discharge port- anticipate problems before they occur. Well beyond the physical limitations of the discharge or loading terminal will be the reputation and business model of your suppliers and the ultimate receivers. Are they aggressive traders who play hardball or are they your usual customers? It makes a difference. SPI Marine knows this market and values your bottom line.