What is the penalty called if a ship exceeds its allowed lay days?

The penalty imposed when a ship exceeds its allowed lay days is known as demurrage. This term refers to the charges incurred by the shipowner for the delayed use of the vessel beyond the agreed lay days, which are the allotted time for loading or unloading cargo. The concept of demurrage serves to compensate the shipowner for the loss of income due to the vessel not being available for the next cargo or voyage during the period of delay.

In maritime commerce, the agreement between a charterer and the shipowner typically specifies both the allotted lay days and the demurrage rates to be applied if those days are exceeded. Understanding this term is crucial as it impacts the overall cost of shipping and charter agreements. This system encourages prompt loading and unloading of cargo, thereby facilitating the efficient use of shipping resources.