Demurrage

In this context, any charge made in respect of delays in loading or unloading of goods, or goods held in storage beyond the agreed time limits.

May also be referred to as detention charges

All ports, terminals and other logistical facilities depend for their efficient operation on goods being unloaded and then collected in a timely manner.

Demurrage charges act as a strong incentive to comply with agreed schedules. Conversely when delays give rise to demurrage charges, there can be disputes as to who is responsible for paying them.

For more details regarding the updated 2020 terms, please speak with your nominated shipping company or refer to the International Chamber of Commerce.

There are two key changes in Incoterms ® 2020 compared to the last edition:

• DAT (Delivered at Terminal) is renamed Delivered at Place Unloaded (DPU)

• FCA (Free Carrier) now allows for Bills of Lading to be issued after loading

Other changes include:

• CIF (Cost, Insurance and Freight) and CIP (Carriage and Insurance Paid To) set out new standard insurance arrangements, but the level of insurance continues to be negotiable between buyer and seller.

• Where listed, cost allocation between buyer and seller is stated more precisely – one article lists all costs the seller and the buyer are responsible for.

• FCA (Free Carrier), DAP (Delivered at Place), DPU (Delivered at Place Unloaded) and DDP (Delivered Duty Paid) now take account of buyer and seller arranging their own transport rather than using a third party.

• Security-related obligations are now more prominent.

• “Explanatory Notes for Users” for each Incoterm® have replaced the 2010 edition’s Guidance Notes, and are designed to be easier for users.

• CIP now requires as default insurance coverage ICC A or equivalent. It was ICC C under Incoterms^® Required insurance coverage under CIF remains.