The document discusses the differences between demurrage, detention, and despatch. Demurrage and despatch refer to additional fees paid in bulk cargo shipments governed by charter parties. Demurrage is paid by charterers to shipowners when loading or unloading of cargo takes longer than agreed, while despatch is paid by shipowners to charterers when cargo operations take less time than estimated. Detention refers to fees in container shipping and is paid when containers are not returned within the allotted free time at ports.

1. Difference between Demurrage,
Detention and Despatch
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2. Difference between Demurrage, Detention and Despatch
• Demurrage and Detention seems to be one of the most popular
topics in this Logistics Trade. If you haven’t read about these terms
yet, this would be a good time to do so.
• A lot of the times however these terms have been confused with a
similar sounding combination Demurrage and Despatch.
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3. Difference between Demurrage, Detention and Despatch
• These two sets are two totally different terms which is explained
here.
• While it sounds similar, the terms Demurrage and Despatch are used
in bulk cargo shipments covered and governed by Charter Parties and
is completely different from the terms Demurrage and Detention
which is used in containerised shipments.
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4. Difference between Demurrage, Detention and Despatch
• In bulk shipments, a lot of the cargoes are fixed on FIO terms (Free In
and Out) which in simple terms means that the charterer (a person
who hires a ship from a ship owner for a particular voyage or for a
period of time) is responsible for the loading and discharging
operations at the ports and the speed at which these operations are
carried out.
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5. Difference between Demurrage, Detention and Despatch
• Before a fixture (agreement to take a ship on charter) is made, a
charterer is required to advise the load/discharge rates – which is the
time (in number of hours or days) it will take to load or discharge the
cargo, to the ship owner.. This information is required by the
shipowner to assess how long his ship will have to be chartered.
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6. Difference between Demurrage, Detention and Despatch
• Based on these calculations, the ship-owner will quote a freight rate
for the voyage, which if the charterer agrees, will result in a fixture.
• Once the fixture has been made, if the charterer fails to load or
discharge as per the load/discharge rates they have given and
allowed in the contract, the ship-owner will hold them liable for
“Demurrage” @ a rate which is pre-agreed between the owners and
the charterers.
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7. Difference between Demurrage, Detention and Despatch
• In this case the term Demurrage refers to the time that the ship-
owner has lost because the charterer could not complete the
required cargo operations within the stipulated/agreed time frame.
• At the other end of the spectrum, if the charterer completes the
load/discharge operations before the time frame indicated, they can
claim “Despatch” from the owners @ a rate which is pre-agreed
between the owners and the charterers.
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8. Difference between Demurrage, Detention and Despatch
• Despatch refers to the time that the ship-owner has been able to
save since the charterer completed the cargo operations quicker
than anticipated/agreed and was able to despatch (sail) the ship
quicker than expected which is to the benefit of the ship owner.
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