Demurrage charges – Why understanding the difference is crucial

The term “demurrage” is generally defined within the insurance industry as the delay of a vessel beyond the time allowed for loading, unloading, or sailing. As per the definition above, this is not a risk that is covered by most Accounts Receivable Insurers in Canada.

The main issue is that “demurrage” is a loosely used term within the shipping industry to define many facets of the loading, unloading and sailing process as the terms and conditions vary from country to country and port to port.

In the event of a claim situation, it is not uncommon for the shipping line to simply encompass fees such as container haulage and detention under “demurrage” on the commercial invoice.  Due to the interchangeability and generalization of the word “demurrage” within the shipping industry, it is essential that you discuss your demurrage charges with a receivables insurance specialist prior to submitting a claim to your insurer to avoid any potential claim payment issues or oversights in compensation from your respective insurer.

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