What is Demurrage

Collection of goods unloaded at a port is normally expected to be arranged within 72 hours. If not daily storage charges known as demurrage will apply.

Free Time

When importing goods there is a period known as free time, usually three working days, from customs clearance having been confirmed. This is the allowed period for you to instruct your shipping agent to arrange forward the goods to the business. If this is not done within that period the goods will be put into storage.

Storage will then be charged on a daily basis and this is what is known as demurrage. The term demurrage derives from the Latin “mora” which means delay.

Causing Demurrage

Failing to accept documents (and therefore gaining access to the original bill of lading) or to remit payment for clearance charges and / or import duty in good time are the most common causes of delay. If the business does not have an open account with its shipping / import agent it will be important to ensure that funds are remitted for these charges as soon as their values are advised.

Tipping Time

In the case of container deliveries, a  demurrage charge can also arise at your premises if there are delays in unloading. For example if three hours are specified as the allowable time to unload the container when presented at your premises, an hourly charge will apply for the excess time taken.

Customs Inspection

If delay is caused by customs clearance demurrage does not arise. If demurrage is incurred as a result of the shipping agent failing to act on instructions issued by the business to ensure reasonable delivery, they will be liable to reimburse the charges. The business will however have to pay the demurrage charges first and subsequently claim against the agent.

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