Delay Damages in Shipping and “Demurrage / Detention” Disputes: How They Arise, How They’re Calculated, and How to Win ThemDelay is the quiet profit-killer of maritime trade. A vessel arrives “almost” on time, cargo is “nearly” ready, paperwork is “about” to clear—and suddenly the bill contains a line item that dwarfs the freight: demurrage, detention, or a broader delay damages claim. These disputes are rarely about a single hour. They are about who owned the clock at each stage of the voyage and whether the contract turns that clock into a fixed daily charge or a fact-heavy damages fight.
This article explains the legal and commercial logic behind delay compensation in shipping and breaks down the most common disputes involving:
- Demurrage (the contractual price of exceeding allowed loading/discharging time under voyage arrangements),
- Detention (in shipping practice: either (i) equipment use beyond “free time” in container logistics, or (ii) late redelivery damages in time charters, often described as “damages for detention”), and
- Delay damages (unliquidated damages where no agreed rate applies, or where delay causes additional losses beyond a rate-based remedy).
Along the way, you’ll find practical drafting guidance and the evidence patterns that tend to decide outcomes in LMAA-style arbitrations and court disputes.
1) The vocabulary: delay, demurrage, detention, despatch — similar words, different legal engines
Delay damages (general concept)
“Delay damages” is an umbrella concept: a party claims monetary compensation because the counterparty’s breach caused delay and measurable loss (loss of market, extra port costs, additional hire, storage, trucking, missed laycans, wasted crew overtime, etc.). These claims are unliquidated—they must be proven in amount and causation unless the contract sets a fixed formula.
Demurrage (voyage charter world)
Demurrage is the classic voyage charter remedy: a pre-agreed daily (or pro-rata) amount payable when laytime is exceeded. It is usually treated as liquidated damages: instead of proving the owner’s actual loss, the contract sets the price of delay.
Demurrage disputes almost always turn on laytime:
- When did laytime start?
- When did it stop?
- Which hours count, and which exceptions apply?
Detention (two common meanings)
- Container demurrage & detention (D&D): In liner/container practice, “demurrage” and “detention” are equipment/time charges tied to free time. Common industry usage (which varies by carrier) is:
- Demurrage: charges for keeping the container at the terminal/port beyond free time.
- Detention: charges for keeping the container outside the terminal (merchant’s premises/inland) beyond free time.
- Time charter late redelivery: In traditional chartering language, “detention” also appears as damages for detention—compensation for late redelivery beyond the charter period (often measured by market hire difference and/or a daily rate approach).
Despatch
Despatch is the mirror image of demurrage: a bonus (often at half demurrage rate) paid when loading/discharging is completed faster than allowed laytime—if the charter provides for it.
2) The legal nature: why demurrage behaves differently from ordinary delay damages
Demurrage clauses are designed to reduce litigation by converting a messy causation exercise into a rate-based outcome. But that simplicity comes at a price: once the parties agree that demurrage is the remedy for exceeding laytime, the debate shifts to the mechanics of counting time and to whether demurrage is the exclusive remedy for the relevant delay.
Key legal consequences that show up again and again in disputes:
- Liquidated vs unliquidated: Demurrage usually avoids proof of actual loss. Delay damages usually require proof of loss, foreseeability, causation, and mitigation.
- Strictness: Demurrage often functions like strict contractual liability once laytime is exceeded—unless exceptions apply.
- Interaction with other clauses: Off-hire (time charters), force majeure, strike clauses, weather working day provisions, and “time bars” can radically change the payable outcome.
3) Demurrage disputes under voyage charters: the seven pressure points
Voyage charter demurrage claims are deceptively mathematical. Most of the legal fighting is about when the clock starts and whether the clock pauses.
(1) Valid NOR: the gatekeeper issue
If the charter requires a Notice of Readiness (NOR), laytime usually cannot start unless the NOR is validly tendered. Disputes arise over:
- readiness of holds/tanks,
- missing documents or certificates,
- whether the ship was actually “at the disposal of the charterer,”
- tendering NOR at anchorage vs at berth.
A demurrage claim can evaporate if the NOR is invalid—even if the ship physically arrived early.
(2) “Arrived ship” and port vs berth charter logic
If the charter is a berth charter, the vessel may not be “arrived” until she reaches the berth. If it is a port charter, she may be “arrived” when she reaches the port limits and is ready to load/discharge, even if congestion prevents berthing. This distinction frequently decides whether congestion time counts as laytime (and later demurrage).
(3) Laytime definitions: WWD, WD, SHINC/SHEX, weather working days
The clause matrix matters:
- WWD (weather working days) vs WD (working days) changes how weather interruptions affect counting.
- SHEX (Sundays and holidays excluded) vs SHINC (included) changes the time base.
- “Unless used” carve-outs can bring excluded periods back into the count.
(4) Exceptions: what pauses the clock (and what doesn’t)
Exceptions clauses can exclude time lost due to:
- strikes,
- breakdowns,
- weather,
- port closures,
- quarantine/health measures,
depending on wording.
The dispute is usually not whether an event occurred, but whether:
- the clause covers that event,
- the event caused the delay that actually mattered,
- the party claiming the exception acted reasonably to mitigate.
(5) SOF integrity: the “Statement of Facts” wars
The Statement of Facts (SOF) often becomes the single most important document in demurrage arbitration. Challenges include:
- inconsistent time stamps,
- missing stoppage reasons,
- terminal vs agent versions,
- retroactive edits.
A clean demurrage claim is a clean timeline.
(6) Demurrage rate application: pro-rata, rounding, time zones, split responsibility
Seemingly minor issues create real money:
- pro-rata calculation method,
- rounding conventions,
- time zone mismatch between SOF and charter,
- multiple receivers and “who pays” issues down the sale chain.
(7) Is demurrage the only remedy?
Owners sometimes attempt to claim additional delay damages (e.g., loss of next fixture) even when demurrage is payable. Whether that is allowed depends on:
- the contract’s exclusivity wording,
- governing law principles on liquidated damages,
- whether the additional loss is truly separate from laytime breach.
4) Container demurrage & detention (D&D): why these disputes feel unfair—and how they’re actually decided
Container D&D disputes often involve parties who never negotiated the “rate.” Charges are imposed under tariffs, bills of lading terms, service contracts, or carrier conditions—then pushed down the chain to the consignee, forwarder, or merchant.
The core building blocks of a container D&D claim
- Free time: the contract grants a number of days free (terminal or street).
- Trigger events:
- terminal demurrage begins after container discharge or availability notice,
- detention begins after gate-out (or after last free day), and ends at gate-in (empty return) or full return.
- The responsible party: merchant/consignee/notify party/forwarder—depends on contractual definitions and booking party structure.
- Proof of timestamps: gate-in/gate-out, discharge, availability, holds, customs release, appointment slots.
Common dispute themes in container D&D
- “We couldn’t pick up because of a carrier hold / customs hold”
The decisive question is contractual: does the free time pause for holds, and which holds qualify? Evidence must show the hold type, when it was applied, and when it was lifted. - Port congestion and appointment scarcity
Merchants argue impossibility; carriers respond that the tariff makes the charge time-based regardless of congestion. Outcomes depend on wording and the factual record of appointment attempts. - Invoice shock and transparency
Parties challenge the legal basis of rates or claim inadequate notice of tariffs/terms. The case turns on incorporation: how the terms became part of the contract. - Split moves and “merchant haulage” complexity
Who controls inland trucking? If merchant controls trucking, delays often shift to the merchant unless the contract allocates congestion risk differently.
Evidence that wins container D&D cases
- EIRs, gate-in/gate-out reports, terminal interchange records,
- carrier availability notices,
- screenshots or logs of appointment booking attempts,
- customs release timestamps,
- written requests for free time extension and the carrier’s response.
In container disputes, the party with the cleanest digital trail usually wins.
5) Time charter delay disputes: off-hire vs detention vs damages for late redelivery
Time charters revolve around hire and availability. Delay disputes often start as one issue and mutate into another.
(A) Off-hire disputes (time lost due to deficiency)
Charterers attempt to place periods off-hire when time is lost due to:
- machinery breakdown,
- crew deficiency,
- vessel inefficiency,
- detention by authorities (depending on clause).
Owners argue:
- the event does not fall within the off-hire clause,
- causation is not met (“by reason of” requirement),
- time was not truly lost (or would have been lost anyway due to congestion/weather).
(B) Late redelivery and “damages for detention”
If the vessel is redelivered late, owners often claim damages measured by:
- the difference between charter hire and prevailing market hire for the overrun period, and/or
- a contractual daily rate or agreed formula.
These claims require careful analysis of:
- charter period and “about” wording,
- redelivery notices,
- whether the charterer acted reasonably to redeliver on time,
- foreseeable losses and mitigation (owners’ next employment plan).
6) Defences and counter-arguments: what parties typically plead—and what tribunals actually care about
Force majeure and exceptions (not automatic)
A force majeure label rarely wins by itself. The clause must fit the event, and the party invoking it must show:
- the event caused the delay,
- reasonable mitigation,
- compliance with notice requirements.
Causation and concurrency
If multiple causes overlap (terminal congestion + documentation issues + weather), tribunals often dissect the timeline: which cause mattered at each stage, and which was contractually allocated to which party.
Notice and time bars
Shipping contracts frequently contain strict notice/time-bar regimes for claims. A technically strong demurrage or detention defence can fail if notice was not given in the required format/time.
Mitigation
For delay damages (unliquidated), mitigation is central: a claimant must show reasonable steps were taken to reduce loss. For demurrage, mitigation may matter less on quantum (because it’s rate-based) but can still matter on exception/cause arguments.
7) Drafting to prevent disputes: clause design that saves real money
For voyage charters (demurrage-focused)
- Define NOR preconditions clearly (documents, readiness, location).
- State whether it is a port or berth charter (or use clear arrived-ship wording).
- Use a laytime matrix that matches the trade reality (WWD vs WD, SHINC/SHEX, “unless used”).
- Spell out how exceptions operate on demurrage (some clauses pause laytime but not demurrage; others do both).
- Set pro-rata and rounding rules; specify time zone basis for SOF.
For container D&D
- Define free time triggers precisely (availability notice vs discharge time vs gate-out).
- Include an extension mechanism: when requests must be made and what evidence is required.
- Address holds explicitly: customs hold vs carrier hold vs documentation hold and whether time stops.
- Ensure transparent incorporation of tariff/service contract terms and a clear responsible party definition (“Merchant”).
For time charters
- Tighten off-hire language and causation tests.
- Align performance warranties with data sources.
- Address late redelivery explicitly: calculation method and market reference.
8) Claim handling and evidence strategy: a practical workflow
Whether you are claiming or defending, the winning approach is systematic:
- Build the master timeline
One spreadsheet, one time zone, every event with source document reference. - Identify the clock type
Is it laytime → demurrage? Is it free time → D&D? Is it off-hire? Is it unliquidated delay? - Extract the clause matrix
Put the key clauses next to the timeline: what counts, what doesn’t, what pauses. - Lock the foundational documents
SOF, NOR, EIRs, gate records, holds, emails, invoices, appointment logs. - Quantify cleanly
Show how each hour is counted or excluded, with a traceable method. - Serve notices early
In delay disputes, late notice can be fatal. - Keep settlement leverage
Many demurrage/detention disputes settle once the timeline is clear and the clause matrix is applied without emotion.
Conclusion: delay disputes are “clock disputes,” not “fairness disputes”
Demurrage and detention disputes feel unfair because they monetize time ruthlessly. But legally, the question is not whether the delay was frustrating. The question is: who contractually owned the clock, and what does the contract say happens when the clock runs out?
- In voyage charters, demurrage turns on NOR validity, arrived ship status, laytime counting, and exceptions.
- In container trade, D&D turns on free time triggers, holds, gate timestamps, and incorporation of terms.
- In time charters, delay disputes pivot between off-hire logic and late redelivery damages.
Yanıt yok