What does demurrage mean?
Demurrage is a charge levied when a ship, vehicle, or other chartered transport is detained beyond the period agreed for loading or unloading its cargo. Rooted in maritime commerce, the term appears most often in shipping contracts and freight agreements, where a vessel's permitted loading or unloading time — known as laytime — is fixed in advance; if that time is exceeded, the shipowner becomes entitled to compensation for lost earnings. The word has broadened to cover similar penalties in rail freight and container logistics, where containers held at a terminal past their free period attract daily demurrage fees. Formal and largely confined to professional, legal, and trade contexts, it carries a neutral but slightly punitive connotation: it exists precisely to discourage delay. Its origin lies in the verb 'to demur', meaning to linger or object, which itself derives from the Latin 'morari', to delay. Understanding demurrage matters because international trade runs on schedules, and this single word captures the financial cost of failing to meet them.
nounA charge payable to the owner of a ship, train, or other chartered vehicle as compensation for delay in loading or unloading beyond the agreed time. More broadly, a fee levied for the detention of property beyond an agreed period.
- A charge paid to the charterer or owner of a vessel for delay in loading or unloading beyond the laytime allowed.
- More generally, any fee imposed for the detention of transport equipment (e.g. containers, railcars) beyond an allotted free time.
- (Historical/rare, banking) A deduction made from bullion coinage to cover minting costs and wastage.
"The shipping company billed the importer thousands of pounds in demurrage after the containers sat at the port for two weeks."
"Because the cargo could not be unloaded within the contracted laytime, the shipowner was entitled to claim demurrage at the rate specified in the charter party."
"The railway imposed demurrage on freight wagons left standing at the sidings for more than forty-eight hours."
Usually treated as an uncountable mass noun referring to charges collectively; a plural form exists but is rare and typically used when referring to separate instances or types of the charge.
"The company disputed several demurrages listed on the freight invoice."
In shipping law, time really is money — and 'demurrage' is literally the price of making a ship wait.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Etymology of demurrage
Demurrage entered English in the seventeenth century from Anglo-Norman and Old French 'demorage', derived from 'demourer', to stay or linger, ultimately from Latin 'morari', to delay. It originally denoted delay itself, then came to mean compensation claimed for such delay, particularly in shipping contracts. Cognate English words include 'demur' and, through a different branch of the same Latin root, terms relating to waiting or hesitation.
How demurrage is actually used
Formal and technical; found chiefly in maritime law, logistics, and trade contracts. In container shipping it is often distinguished from 'detention' (charges for holding equipment outside the port) though usage varies between carriers and regions.
Easily confused with demurrage
A demurrer is a legal plea that a complaint is insufficient on its face; demurrage is a commercial charge for delaying a ship, vehicle, or goods.
A storage fee compensates simply for keeping goods in space over time; demurrage specifically penalizes exceeding an agreed free period under a contract.