Refinery Demurrage: Are You Solving the Right Problem?

A vessel runs over laytime. A claim arrives. It gets processed and closed. That’s usually the full arc of a demurrage event.  

That cycle is expensive because it feels manageable. Treating demurrage as a cost to handle rather than a problem to diagnose means the underlying causes stay invisible, and the invoices keep coming. You know how much you’re paying, but not why. Without that clarity, any well-intentioned cost reduction effort falls flat.  

There are three distinct types of refinery demurrage, each pointing to a different part of the operation. Knowing which one you’re looking at is what separates reactive claim management from effectively reducing demurrage costs for your facility.  

Scheduling Demurrage

Scheduling demurrage is often considered strategic, or “the necessary evil”. When a scheduler nominates a vessel size that is too large to be loaded in a single berth visit, the delay is a deliberate commercial decision. The cargo had to move, the window was narrow, and delaying entirely would have cost more. 

Sometimes, that logic is sound. The problem is when scheduling demurrage accumulates without review. To ensure that scheduling demurrage is minimised, it’s imperative to track: 

• If these trade-offs happen consistently  

• If the costs are attributed correctly  

• If the scheduling assumptions behind them are still valid  

• If the expected economic benefit was realised 

Scheduling demurrage is most within a facility’s control before a vessel arrives.  
It rarely gets treated that way. 

Structural Demurrage

Some demurrage is built into the physical constraints of the facility. Berth capacity, shore tank configuration, sea-line sizing, and pump arrangements all impose hard limits on how much, and what goes in and out of a facility.  

For instance, a refinery with a single product berth and high cargo throughput will incur structural demurrage regardless of how well operations are run. Besides better planning around the facility’s physical constraints, refinery managers can build business cases demonstrating cost-benefit for site improvements that support the target throughput.  

It’s important to note that structural demurrage frequently gets attributed to operational causes. A delay that looks like poor pumping rates may reflect a lack of appropriately sized loading line and manifold combinations. Correctly categorising it changes whether you pursue a process change or build a capital case. 

Operational Demurrage

This is where most of the avoidable cost sits. Operational demurrage comes from inefficiencies in how the operation is run: slow pump start, shift-handover delays, late documentation, or waiting for sample results.  

Individually, these delays are short. A 45-minute gap here, a two-hour hold there. Across a vessel visit, and especially across the facility, they add up to meaningful exposure that could have been prevented. 

The challenge is that operational demurrage requires granular, structured data capture to see clearly. Laytime outcomes alone won’t show you that delays cluster around shift handovers on a particular berth, or that a specific cargo type consistently produces documentation delays that push you into demurrage. That insight requires structured, consistent recording of delays at the time they occur, not reconstructed from memory when the claim arrives. 

Without that, operational demurrage stays invisible. Individual delays get noted and forgotten while the aggregate cost gets absorbed quarter after quarter. 

The Bottom Line

Demurrage rarely has one cause and treating it as such makes it harder to reduce costs. At most facilities, it’s a mix of all three types occurring at the same time, which is why blanket reduction targets tend to underdeliver. 

Maron’s OAS Berth Planning & Jetty Scheduling gives refinery managers and their teams a structured way to capture data at the berth, categorise it, and see estimated demurrage costs in real-time. 

One customer took that data and built a clear picture of what was driving their demurrage, who owned it, and what needed to change. The result was a reduction in annual demurrage exposure of over $1 million. 

That’s where we’d start with your facility too. If you’d like to talk through what your demurrage profile looks like and what a realistic reduction looks like for your operations, get in touch with our specialists today.