Demurrage

The term demurrage originated in vessel chartering (notably voyage chartering) and refers to the period when the charterer remains in possession of the vessel after the period normally allowed to load and unload cargo (laytime). By extension, demurrage refers to the charges that the charterer pays to the shipowner for its extra use of the vessel. Officially, demurrage is a form of liquidated damages for breaching the laytime set out in the governing contract (the charter party). The demurrage sometimes causes a loss to the seller as it increases cost of the total freight.