Demurrage
From Wikipedia, the free encyclopedia
Demurrage (from demur, French demeurer, to delay, derived from Latin, mora) is a general term used to indicate a surcharge for delays in delivering a product. It has application in a variety of fields.
In industries where items are sold in rented containers, demurrage is synonymous with the free rental of the container for a given period of time. The assumption is that a given amount of free time using the container is built into the cost of the item.
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[edit] Shipping
In commercial shipping, demurrage is a term that applies to the time used for loading or off-loading cargo beyond the contractually agreed laytime for such operations. (see Affreightment: under Charter-parties).
[edit] Railway transport
In railway law, it is the charge on detention of trucks (or rolling stock), either to the shipper for holding the car (laden or not), or to the connecting railroad(s) while the car is empty and returning to the home road (in either case, as a way to encourage speedy unloading and return of empties to improve utilization of rolling stock).
[edit] Business and banking
In business, demurrage can refer to a delay in delivery of a product via delivery truck. When a delay occurs with product delivery, the delivery party can elect to claim a no fault delay by submitting a demurrage charge. Criteria for allowable demurrage, payment conditions, and payment terms for demurrage are typically prenegotiated and accepted by the vendor via contract prior to conduct of business. Some vendors allow free no-cost time for limited hour(s) when demurrage occurs, others do not allow free time for delays. The demurrage charge is normally an hourly rate. Unforseeable until delivery, costs of delays are sometimes separately invoiced from the cost of deliverable.
In banking, demurrage is the charge per ounce made by the Bank of England in exchanging coin or notes for bullion.
[edit] Currency
In complementary currencies' field, demurrage is used to define a cost associated with owning or holding currency. It is sometimes referred to as a carrying cost of money. The term was used by Silvio Gesell. It is regarded by some as having a number of advantages over interest: while interest on deposits lead to discount the future and to place immediate gains ahead of long-term concerns, demurrage does the opposite, creating an incentive to invest in assets which lead to longer-term sustainable growth. Furthermore, demurrage acts like inflation, stimulating the circulation of the currency, encouraging economic activity, and increasing employment. See main article demurrage (currency)
[edit] References
- Transaction Net A "Green" Convertible Currency, Bernard A. Lietaer
This article incorporates text from the Encyclopædia Britannica Eleventh Edition, a publication now in the public domain.
