Difference between Demurrage, Detention and Despatch 
                     Difference between Demurrage, 
Detention and Despatch 
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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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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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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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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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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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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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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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