Demurrage vs. Wharfage — What's the Difference?
By Tayyaba Rehman — Updated on October 5, 2023
Demurrage refers to the fee charged for extended storage of cargo, while Wharfage pertains to the charge for handling cargo at a wharf.
Difference Between Demurrage and Wharfage
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Key Differences
Demurrage and Wharfage are terms primarily used in shipping and port operations. Demurrage is a fee levied by the shipping company upon the shipper for holding cargo beyond the agreed-upon time. It acts as a penalty to ensure timely unloading and release of transport equipment. Wharfage, on the other hand, is a fee charged for goods passing through or temporarily stored at a wharf.
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Oct 05, 2023
Both Demurrage and Wharfage play a crucial role in the logistics and shipping industries. They encourage the efficient movement and handling of goods. While Demurrage serves as a deterrent to unnecessary delays, Wharfage ensures the maintenance and availability of port facilities.
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Oct 05, 2023
While both terms relate to charges, their basis of imposition differs. Demurrage is imposed due to delays, aiming to compensate the carrier for the loss of opportunity to use its equipment elsewhere. Wharfage is a straightforward fee for using the facilities and services of the wharf.
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Oct 05, 2023
The nature of the two charges is distinct as well. Demurrage is a result of inefficiencies or unexpected events causing delays, which makes it more of a penalty. Wharfage is a predetermined fee and is expected to be paid by shippers or consignees for utilizing the wharf's infrastructure.
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Oct 05, 2023
Comparison Chart
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Purpose
Compensate for equipment use delay
Cover cost of wharf infrastructure
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Definitions
Demurrage
A penalty for delayed return of equipment.
The transport company imposed a demurrage on the late return of their containers.
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Wharfage
Fee for handling goods at a wharf.
The wharfage for the imported goods was surprisingly high.
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Demurrage
Cost linked with cargo storage delays.
The prolonged inspection resulted in an unexpected demurrage.
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Wharfage
Charge related to the usage of a wharf's facilities.
The invoice included a line item for wharfage.
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Demurrage
Charge to encourage timely unloading.
To avoid the demurrage, they sped up the unloading process.
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Wharfage
A tariff for cargo passing through a wharf.
Every shipment at the harbor incurs a wharfage.
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Demurrage
Financial penalty in shipping for untimely operations.
Every extra day at the port increases the demurrage.
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Wharfage
Cost associated with temporary storage at a wharf.
Due to the short storage duration, the wharfage was minimal.
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Demurrage
Fee for retaining cargo beyond agreed time.
The shipper incurred a demurrage for the two-day delay.
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Wharfage
Amount payable for services rendered at a port's dock.
The company budgeted for the wharfage at the main seaport.
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Demurrage
The term "demurrage" from Old French demeurage, from demeurer – to linger, tarry – originated in vessel chartering and referred to the period when the charterer remained in possession of the vessel after the period normally allowed to load and unload cargo (laytime). By extension, demurrage refers to the charges that the charterer pays to the ship owner for its delayed operations of loading/unloading.
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Wharfage
Accommodation provided at a wharf for the loading, unloading, or storage of goods.
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Demurrage
A charge payable to the owner of a chartered ship on failure to load or discharge the ship within the time agreed.
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Demurrage
Detention of a ship, freight car, or other cargo conveyance during loading or unloading beyond the scheduled time of departure.
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Demurrage
(shipping) the detention of a ship or other freight vehicle, during delayed loading or unloading
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Demurrage
The detention of a vessel by the freighter beyond the time allowed in her charter party for loading, unloading, or sailing.
The claim for demurrage ceases as soon as the ship is cleared out and ready for sailing.
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Wharfage
The fee or duty paid for the privilege of using a wharf for loading or unloading goods; pierage, collectively; quayage.
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Demurrage
A charge required as compensation for the delay of a ship or freight car or other cargo beyond its scheduled time of departure
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Demurrage
Detention of a ship or freight car or other cargo beyond its scheduled time of departure
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Wharfage
A platform built out from the shore into the water and supported by piles; provides access to ships and boats
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FAQs
What does Wharfage refer to?
Wharfage is the fee charged for handling or storing cargo at a wharf or dock.
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Oct 05, 2023
What is Demurrage?
Demurrage is a fee charged for retaining cargo beyond a specified time at a port or terminal.
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Can Demurrage costs be avoided?
Yes, by ensuring cargo is moved or cleared within the stipulated free-time provided by the terminal or carrier.
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Who is responsible for Wharfage costs?
The party utilizing the wharf's services, usually the shipper or consignee, bears the Wharfage costs.
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Is Wharfage based on weight or volume of cargo?
Wharfage can be based on weight, volume, or even a flat rate, depending on the port's tariff structure.
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Is Wharfage applicable to all types of cargo?
Generally, yes. Wharfage applies to most cargo types, but the rates might differ based on the cargo and specific port tariffs.
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Does Demurrage apply to both imports and exports?
Yes, demurrage can apply to both, depending on the delay in loading (exports) or unloading (imports) beyond the agreed time.
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Why is Demurrage imposed?
Demurrage serves as a penalty for delays, compensating carriers for the potential loss of using their equipment elsewhere.
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When do shippers typically incur Wharfage?
Shippers incur Wharfage when their cargo is loaded, offloaded, or temporarily stored at a wharf.
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Who typically pays the Demurrage fee?
Usually, the shipper or the consignee is responsible for demurrage charges.
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Can Demurrage and Wharfage be included together in a shipping bill?
Yes, both can appear on a bill, but they are distinct charges and are usually itemized separately.
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What factors might affect Wharfage rates?
Factors can include type and size of cargo, duration of storage, port location, and specific port facilities used.
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Does Wharfage vary from port to port?
Yes, Wharfage can vary based on port tariffs, location, and the facilities they provide.
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Are there any ways to negotiate Demurrage fees?
Some carriers might provide flexibility in special cases, but it often requires prior communication and valid reasons.
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Is Demurrage applicable only in maritime shipping?
While commonly associated with maritime shipping, demurrage concepts can also apply to rail, trucking, and other transport modes.
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Oct 05, 2023
Author Spotlight
Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
