The concepts
Demurrage is compensation for time the vessel spent waiting beyond the agreed allowance. The money has, in a real sense, already been earned — the ship has already sat there. Losing the claim afterwards, on documentation or a time bar, is the purest form of avoidable loss in shipping.
| Term | Meaning |
|---|---|
| Laytime | The time allowed to the charterer for loading and discharging, without extra payment |
| Notice of Readiness (NOR) | The notice that the vessel has arrived and is ready to load or discharge |
| Laytime commencement | When the clock starts, after NOR and any agreed turn time |
| Demurrage | Agreed daily rate payable once laytime is exceeded |
| Despatch | Payment to the charterer where loading/discharge finishes early, where agreed |
| Statement of Facts (SOF) | The chronological record of events in port |
| Time bar | The contractual deadline for presenting the claim with supporting documents |
Where claims fail
1. The time bar
Many charterparties require the claim to be presented with all supporting documents within a short window — 90 days from completion of discharge is common, and some contracts are shorter. Miss it and a valid claim becomes worthless, regardless of merit.
Two things go wrong: nobody starts the calculation until the invoice cycle prompts it, and the claim is submitted without the full document set, which some clauses treat as no submission at all.
Control: a claim register with the time bar date recorded on completion of discharge, escalating automatically at 30, 45 and 60 days.
2. Incomplete documentation
A typical requirement includes: notice of readiness with proof of tender, statement of facts signed by all parties, pumping logs where relevant, letters of protest, time sheets, and the laytime calculation itself. Missing one item can invalidate the whole submission under a strict clause.
3. Defective Notice of Readiness
NOR validity depends on the charterparty and on the facts: whether the vessel was an arrived ship, whether it was physically and legally ready, whether free pratique and customs clearance were required first, and whether the notice was tendered within the agreed hours and to the right party.
An invalid NOR moves laytime commencement, sometimes by days.
Control: a standard NOR procedure per trade, with the master instructed on tendering and re-tendering, and every tender recorded with time, method and recipient.
4. Poor statement of facts
The SOF is the evidence. It must be chronological, precise to the minute, signed, and consistent with the ship's logs. Common failures: vague entries ("cargo operations suspended — weather"), unsigned documents, and gaps.
Control: train masters on SOF preparation for the specific trade, insist on signature by terminal and agent, and record protests where the SOF as offered is inaccurate.
5. Calculation errors
Laytime calculation depends on the exact wording: weather working days, SHEX or SHINC, whether time counts once on demurrage ("once on demurrage, always on demurrage"), reversible or non-reversible laytime, and exceptions.
A process that protects claims
| Stage | Action | Owner |
|---|---|---|
| Pre-arrival | Confirm NOR requirements and tendering hours | Operations |
| On arrival | Tender NOR correctly; record everything | Master |
| During operations | Maintain SOF; issue letters of protest promptly | Master |
| On completion | Collect the full document set before departure | Master / agent |
| Completion + 3 days | Laytime calculation prepared | Post-fixture |
| Completion + 10 days | Claim submitted with full documents | Post-fixture |
| Ongoing | Claim register with ageing and time-bar alerts | Post-fixture |
| Settlement | Reconcile against freight and other balances | Accounts |
Collecting documents before departure is the highest-value step. Once the ship has sailed, obtaining a signed SOF from a terminal that has moved on to the next vessel becomes slow and sometimes impossible.
The scale of the exposure
A mid-size fleet running sixty voyages a year with an average demurrage claim of USD 60,000 has roughly USD 3.6 million in claims flowing through the process annually. A 5% failure rate is USD 180,000 lost, for reasons that are entirely administrative.
Letters of protest
Cheap, immediate and disproportionately effective. Issue one whenever: cargo operations are interrupted for reasons outside the vessel's control, the terminal's figures differ from the ship's, cargo condition is questionable at loading, or the SOF as presented is inaccurate. A protest issued at the time carries far more weight than an assertion made three months later.
laytime and demurrage are entirely charterparty-specific. This article is general information, not legal advice — take advice on your contract. Failure-cause chart is an indicative model. Reviewed by the Zeaclub Editorial Team, 24 August 2026.
Frequently asked questions
What is demurrage?
Liquidated damages payable by the charterer to the owner when laytime is exceeded, at the daily rate agreed in the charterparty.
When does laytime start?
After a valid Notice of Readiness is tendered and any agreed turn time has elapsed, subject to the charterparty terms and to the vessel being an arrived ship, physically and legally ready.
How long do I have to claim demurrage?
As specified in the charterparty. Ninety days from completion of discharge, with full supporting documents, is a common requirement, and some clauses are stricter.
What documents support a demurrage claim?
Typically the NOR with proof of tender, a signed statement of facts, time sheets, pumping logs where relevant, letters of protest and the laytime calculation. Check the specific clause — some require the claim to be rejected if any document is missing.