Demurrage/Despatch for Sales and Purchase Contracts

Demurrage/despatch refers to a two-part concept. 'Demurrage' is a charge imposed for delays during loading/unloading beyond agreed-upon times, increasing costs. Conversely, 'despatch' is a reward granted when loading/unloading operations are completed faster than stipulated in the contract, reducing costs. These concepts aim to promote efficiency in logistics.

Demurrage or despatch conditions can be established with the customer (or provider in the case of a purchase contract) to calculate the penalty or bonus applicable for the time spent loading or unloading a vessel with respect to the contractually allowed time. The charge or discount for demurrage or despatch can be included in the sales or purchase invoice, or can be included in a separate demurrage invoice.

The demurrage or despatch calculation uses the whole shipment quantity, rather than the despatch order quantity. This is because it is the shipment that is in demurrage or despatch, not the despatch order.

After determining the demurrage or despatch value using the shipment quantity, it is then distributed across the despatch orders using their proportional quantities. Therefore, the sum of all the demurrage or despatch for the despatch orders is the same as the demurrage or despatch of the whole shipment.

Configuration

Demurrage/despatch conditions can be entered in several screens in MineMarket:

• In a set of contract terms in a Sales Contract or Purchase Contract—Included in a sales or purchase invoice, or for a demurrage invoice
• In a Despatch Order—To override a condition from the sales or purchase contract
• In a Freight Contract or Service Contract—Included in a freight or service invoice, or for a freight demurrage or service demurrage invoice
• On a Shipment—For a freight invoice or freight demurrage invoice of a shipment without a despatch order

Only demurrage/despatch conditions at the applicable locations apply in the invoice. For sales and purchase invoices, only one demurrage location can apply. This location is either the loading or unloading location, and depends on the delivery term of the contract. The following table exemplifies where demurrage/despatch is configured, based upon the delivery term.

Delivery Term	Loading Port	Discharge Port
FOB	Customer (sales contract)	N/A
CIF, DES	Ship owner (service contract)	Ship owner (service contract) Customer (sales contract)