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demurrage

dih-MUR-ij /dɪˈmɜːrɪdʒ/

nounC2GMATCATUPSC

FormalLegalCommercial

A fee charged for the delay of freight vehicles, rail cars, or shipping containers beyond the allotted loading or unloading time.

Refers to financial penalties incurred due to detention of transport equipment beyond agreed free time.

The story behind the word. Originated in maritime law from Anglo-French 'demurrage', meaning compensation for delaying a ship. When commercial railways expanded in the 19th century, the legal concept was adopted to penalize shippers who held rail freight cars hostage as cheap temporary storage.

Word relationships

detention charge: Detention charge often applies after equipment leaves terminal boundaries, while demurrage traditionally applies inside terminals or on track sidings.

dispatch money: Dispatch money is a bonus paid to charterers for completing loading earlier than agreed.

Commonly confused with

storage fee: Storage fees cover warehouse space usage, whereas demurrage compensates carriers for holding up their rolling stock.

Word family

demur (verb): To raise objections or show reluctance; originally to linger or delay.

Collocations

demurrage fees
incur demurrage
demurrage rate
demurrage charges

Example sentences

"The manufacturing plant incurred heavy demurrage charges because its warehouse crew failed to unload the rail tank cars within forty-eight hours." Supply Chain Financials

Memory hook

DEMUR (object/delay) + AGE: pay a fee when you DEMUR and delay cargo unloading. Penalty fee paid for delaying equipment.

When not to use

Do not use for general late fees or rent; demurrage is specifically tied to carrier transport equipment detention.

Fun facts

During supply chain disruptions, demurrage fees worldwide soared into billions of dollars as ports and terminals clogged up.