DEMURRAGE Meaning and
Definition
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Demurrage refers to a term primarily used in the shipping and logistics industry, describing the charges or fees imposed on the delayed use of a vessel, container, or other transport facilities beyond the agreed-upon period. It is a form of compensation typically payable by the recipient of the goods for taking more time to unload, return, or release the shipping equipment than was originally agreed upon.
Demurrage can be seen as a penalty or incentive for efficient use of transportation resources. It aims to encourage swift handling and movement of cargo, avoiding unnecessary bottlenecks or delays that can disrupt the overall supply chain. The charges often increase with each day beyond the agreed-upon free time, acting as a disincentive for extended use of transport assets. These fees cover the costs incurred by the shipping company due to delayed return or improper utilization of their equipment.
Demurrage is common in industries where efficient time management is crucial, such as maritime shipping, rail transportation, or container leasing, as it helps to prevent congestion and optimize resource allocation. It is typically outlined in contractual agreements between the carrier and the customer, specifying the duration of free use and the subsequent charges. Additionally, demurrage can have legal implications, as failure to pay the fees may result in legal action or the claim of ownership of the goods by the carrier until the outstanding demurrage is settled.
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An allowance made to the owners of a ship by the freighters for delay or detention in port beyond the time agreed upon; in the railway clearing-house, fixed charges for the detention of carriages, trucks, &c., belonging to another company.
Etymological and pronouncing dictionary of the English language. By Stormonth, James, Phelp, P. H. Published 1874.
Common Misspellings for DEMURRAGE
Etymology of DEMURRAGE
The word "demurrage" originated from Middle English and has a Latin and Old French etymology.
The term comes from the Latin word "demorari", meaning "to delay" or "to hinder". From this, it passed into Old French as "demorer", which also means "to delay" or "to tarry". In medieval English, the verb "demour" was used in the context of "remaining in a place" or "delaying" something.
Over time, the meaning of "demurrage" evolved to specifically refer to the charges or penalty paid for the delay in unloading or returning a ship or freight beyond the agreed-upon time. This maritime usage of the word became well-established during the 17th century, and it has retained its specific meaning in relation to shipping and freights ever since.
Similar spelling words for DEMURRAGE
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