A penalty charge payable by the charterer when a vessel is kept at the loading or discharging berth beyond the agreed laytime.
In practice
For a master, accurate documentation of laytime is essential. Time sheets recording the time of arrival, the notice of readiness tendering, the commencement of laytime, cargo operation times, and any interruptions — weather, port delays, vessel faults — must be signed by the port agent or terminal representative. Any exception that interrupts laytime, such as a breakdown of ship's gear or the vessel not being ready in all respects, must be documented and protested if the charterer seeks to credit the time against laytime at the owner's expense.
Regulatory detail & full definition
Demurrage is a contractual penalty payable by the charterer — or the shipper or receiver in some voyage charter arrangements — when a vessel is detained in port beyond the agreed laytime. Laytime is the period stipulated in the charter party within which the charterer must complete loading or discharging operations. Once laytime expires, demurrage begins to accrue at a daily rate specified in the charter party, and it continues until the vessel is released or the cargo operations are complete.
For a master, accurate documentation of laytime is essential. Time sheets recording the time of arrival, the notice of readiness tendering, the commencement of laytime, cargo operation times, and any interruptions — weather, port delays, vessel faults — must be signed by the port agent or terminal representative. Any exception that interrupts laytime, such as a breakdown of ship's gear or the vessel not being ready in all respects, must be documented and protested if the charterer seeks to credit the time against laytime at the owner's expense.
Disputes over laytime and demurrage are among the most common sources of maritime arbitration. The specific wording of the charter party — 'SHINC' (Sundays and Holidays Included), 'SHEX' (Sundays and Holidays Excluded), 'WWD' (Weather Working Days) — determines whether particular periods count against laytime. Officers must understand the applicable charter party terms and ensure that the time log is contemporaneous, signed, and consistent with the deck log.