Updated: 29 February 2024

What Does Demurrage Mean?

Demurrage is the penalty a party incurs from a transport company for exceeding the allowed time a cargo can be stored in the company warehouse.

It is also called a detention charge.

Insuranceopedia Explains Demurrage

Cargo can be stored in the transport company’s warehouse for a definite period of free time (usually seventy two hours). When cargo stays there longer than the allotted free time, that’s when company begins to charge for demurrage. Either the sender or the receiver can be charged.

Demurrage is a penalty that affects both the trucking and shipping industries.

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