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DEMURRAGE VERSUS DESPATCH MONEY

     Demurrage in vessel operations refers to the amount paid by the charterer of a ship as a compensation to the ship owner for any damage that may occur due to the charterer’s inability to complete operations on a vessel (loading and offloading) within the allowable period (lay-days).

detention of charges
container terminal

In a charter party , when a ship owner makes his vessel available to a charterer. there is an agreed period within which the chatterer is expected to finish operations on the vessel so that the vessel can proceed to sea, when that allowable period elapses, the charterer is obliged per the charter party agreement to compensate the ship owner for the delay caused to his vessel to make good any potential business that might have been lost due to the said delay.

With regards container haulage, the term demurrage is also used to describe the charges due when a shipper is not able to clear or pick up his container or return the said container within the free time allowed.

    In Ghana,  some container terminal operators allow up to 72 hours as free time within which a shipper or merchant is expected to pick up his container from the terminal, inability to pick up your container within the allowable free time would attract a penalty in the form of demurrage . Note that once you are in demurrage every shifting or lifting of your container comes with an extra cost. The GPHA allows 7 days free time to clear  containers after which you begin to pay rent.

Also Read Why is the Ghanaian still paying so much to clear used cars from the ports ?

   In addition, after a shipper picks up a container, the container supplier (usually the shipping carrier) would allow some free time depending on where the container would be transported to within which a merchant should return the container, inability to do so would also attract demurrage.

     The term “detention”  can also sometimes be used to describe the instance when a merchant or shipper holds on to a container more than the allowable free time outside the terminal of the supplier and hence  pays “detention charges” . Container suppliers or shipping lines in Ghana usually allow  7 days free time depending  on the location to which the container would be transported to. Please do well to confirm with your container supplier in order to avoid  paying demurage.

With regards clearing cars at Ghana’s ports, a total of usually 60 days is allowed to clear cars failure which would lead to confiscation of your car.

NB. In Ghana, It is possible to start your clearing processes way before the arrival of your cargo once you have received your shipping documents (bill of lading) so as to avoid paying demurrage which may arise as a results of delays in the clearing process.

       Despatch money on the other hand is the opposite of demurage , this is the money that would be paid to the charterer when he is able to ensure that loading and off loading of  a chartered vessel is completed before the elapse of the allowable time (lay days) this is however dependent on the charter party agreement between both parties. The rationale behind this is to compensate the charterer or cargo owners for any expenses they may have incurred in order to save time for the ship.

Free time, Detention & Demurrage charges, terms and conditions vary from one country to another; please refer to each country’s specific tariffs for specific  information.

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