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Officially, demurrage is a form of liquidated damages for breaching the laytime as it is stated in the governing contract (the charter party). The demurrage sometimes causes a loss to the seller as it increases cost of the total freight. [3] The demurrage fee is often a daily amount agreed between charterers and ship owners.
Statement of Facts (SoF) is a report listing all events during a ship's stay in port in chronological order and is used for the calculation of the lay time [1] [2] and demurrage. [3] The Statement of Facts may aid in the resolution of conflicts by providing transparency and a precise documentation. [3]
Laytime can commence under a voyage charterparty requiring service of a notice of readiness when no valid notice of readiness has been served in circumstances where (a) a notice of readiness valid in form is served upon the charterers or receivers as required under the charterparty prior to the arrival of the vessel; (b) the vessel thereafter ...
A voyage charter specifies a period, known as laytime, for loading and unloading the cargo. If laytime is exceeded, the charterer must pay demurrage. If laytime is saved, the charter party may require the shipowner to pay despatch to the charterer. [1] A time charter is the hiring of a vessel for a specific period of time.
A suit will lie against the seller if the seller has insufficient title, [7] or the goods are not of satisfactory quality, [8] or do not comply with sample [9] or description. [10] A suit will lie against the shipper if the goods are damaged through insufficient packing, [11] [12] or if any loss is suffered through insufficient labelling. [13 ...
Such an incorporation is valid and enforceable even without the issuance of a bill of lading. In the reverse case, if a carrier issues a third-party shipper with a bill of lading that incorporates charterparty terms, the shipper/cargo-owner would not be liable for fees such as demurrage, which are payable only by a charter.
Demurrage in a currency system reduces discount rates, and thus increases the present value of a long-term investment, and thus gives an incentive for such investments. [ 1 ] Unlike inflation , demurrage gradually reduces only the value of currency held: it functions as a negative interest (a tax) on currency held versus inflation that also ...
Worldscale is a unified system of establishing payment of freight rate for a given oil tanker's cargo. Worldscale was established in November 1952 by London Tanker Brokers' Panel on the request of British Petroleum and Shell as an average total cost of shipping oil from one port to another by ship.