How To Reduce Your Demurrage Bill



Simon Shore, Managing Director, Cirrus Logistics Ltd


This paper has been written to introduce an approach to vessel planning and scheduling that can return million-dollar savings per terminal per year. For supply chains that involve the chartering of vessels, demurrage is seen by many organisations as an inevitability of moving cargoes. Billions of dollars of demurrage charges are levied each year across the bulk shipping sector. In today's world, with commodity prices depressed, demurrage is increasingly being seen as a cost that needs to be addressed. Fortunately, with the advent of new technologies and vessel planning techniques, vessel schedulers are moving away from spreadsheet solutions and reaching for new scheduling technology.

This paper introduces a new approach to vessel scheduling that can return significant demurrage savings.Profit driven supply chains, such as the oil industry, sometimes overlook the cost side of the equation because the profit per vessel movement significantly outweighs the cost of the vessel charter and any potential demurrage. However, when we consider demurrage costs quickly add up to millions of dollars, then it is easy to understand why a new approach to scheduling is attractive, especially when this approach highlights opportunities to save demurrage and increase profits…

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