Commencement of Laytime

Commencement of Laytime is one of the most important issues in voyage chartering because it determines the moment when the charterer’s agreed time for loading or discharging begins to run. Once laytime starts, every hour may affect the final calculation of demurrage or despatch. For that reason, shipowners, charterers, shipbrokers, masters, port agents, and cargo interests must understand exactly when the laytime clock starts and which contractual conditions must be satisfied before time can count.

In most voyage charterparties, laytime does not begin merely because the ship is near the port or because the shipowner wants the cargo operation to start. Laytime usually commences only after three essential requirements have been satisfied: the ship must have reached the contractual destination, the ship must be physically and legally ready to load or discharge, and a valid Notice of Readiness (NOR) must have been tendered in accordance with the charterparty.

The commencement of laytime is therefore a combination of geography, readiness, documentation, contractual wording, and timing. A small mistake in any of these elements may invalidate the Notice of Readiness (NOR), postpone the start of laytime, reduce a demurrage claim, or even create a despatch liability where the shipowner expected to recover demurrage.

When Does Laytime Commence?

Laytime commences when the conditions required by the voyage charterparty have been fulfilled and the notice period, if any, has expired. In practical chartering terms, the question is usually answered by examining the laytime clause, the Notice of Readiness (NOR) clause, the loading or discharging place, the agreed working hours for tendering notices, and any special wording such as WIBON, WIPON, WICCON, or WIFPON.

Although charterparty forms vary, the usual requirements are:

1. The ship must be an arrived ship at the agreed destination.
2. The ship must be physically ready for cargo operations.
3. The ship must be legally ready to load or discharge.
4. A valid Notice of Readiness (NOR) must be tendered to the proper party.
5. The agreed notice time or waiting period must expire before laytime begins, unless the charterparty provides otherwise.

These requirements should not be treated as formalities. They are the legal foundation for the laytime calculation. If the ship has not arrived at the contractual place, or if the ship is not physically or legally ready, or if the Notice of Readiness (NOR) is invalid, laytime may not commence at all unless the charterers waive the defect or the charterparty contains wording that produces a different result.

Arrived Ship and Commencement of Laytime

The concept of the arrived ship is central to the commencement of laytime. A ship must normally reach the place required by the charterparty before the master can validly tender Notice of Readiness (NOR). The agreed destination may be a port, berth, dock, anchorage, loading area, discharging area, offshore terminal, river port, or customary waiting place, depending on the charterparty wording.

The classic English law test for an arrived ship in a port charter was considered in The Johanna Oldendorff. Lord Reid explained that the essential factor is not merely the ship’s geographical position, but whether the ship is within the port and at the immediate and effective disposition of the charterer. If the ship is at the usual waiting place within the port, it will generally be presumed to be at the charterer’s disposal, unless special circumstances show otherwise.

This principle is important because ships often arrive at congested ports where the nominated berth is not immediately available. If the ship is under a port charter and has reached the normal waiting place within the port, the ship may be treated as an arrived ship even though it has not yet reached the berth. However, if the charterparty is a berth charter, the ship may have to reach the actual berth before Notice of Readiness (NOR) can be validly given, unless the charterparty includes words that alter this position.

Port Charterparty and Berth Charterparty

The distinction between a port charterparty and a berth charterparty is fundamental. Under a port charterparty, the agreed destination is the port. Under a berth charterparty, the agreed destination is the berth. This distinction affects when the ship becomes an arrived ship and when the Notice of Readiness (NOR) may be tendered.

In a port charterparty, the ship may be able to tender Notice of Readiness (NOR) once it has reached the port or the usual waiting place within the port and is at the charterer’s immediate and effective disposition. In a berth charterparty, the ship is usually not an arrived ship until it reaches the specified berth. If the berth is occupied, the shipowner may bear the waiting time unless the charterparty contains protective wording such as WIBON or a time-lost waiting-for-berth clause.

For this reason, the words used in the fixture recap and charterparty are commercially important. A phrase such as “one safe berth” may produce a different result from “one safe port.” In congested ports, the difference may represent several days of laytime, demurrage, or waiting time.

Notice of Readiness (NOR)

Notice of Readiness (NOR) is the formal notice by which the master or the ship’s agent informs the charterer, shipper, receiver, or other nominated party that the ship has arrived at the contractual destination and is ready in all respects to load or discharge the cargo. The Notice of Readiness (NOR) is the usual contractual trigger for the commencement of laytime.

A Notice of Readiness (NOR) should accurately state that the ship has arrived and is ready. If that statement is untrue when the notice is tendered, the notice may be invalid. A notice that is invalid when tendered does not usually become valid automatically when the ship later becomes ready, unless the charterparty provides for automatic validation or the charterers waive the defect.

In practice, the Notice of Readiness (NOR) should identify the ship, voyage, charterparty, port, berth or waiting area, date and time of tendering, and the fact that the ship is ready in all respects for loading or discharging. It should be tendered to the correct party, by the correct method, and during the permitted hours if the charterparty restricts tendering to office hours or working days.

Physical Readiness of the Ship

A ship is physically ready when it can begin cargo operations without delay, subject only to the charterer’s orders and the availability of the berth or cargo. For loading, this normally means that cargo holds, hatch covers, cranes, grabs, cargo gear, ballast condition, and related equipment are ready for the intended cargo. For discharge, the ship must be ready to deliver the cargo safely and efficiently.

Physical readiness is especially important in dry bulk trades where hold condition is frequently disputed. If the ship tenders Notice of Readiness (NOR) before the cargo holds are clean, dry, odour-free, and suitable for the intended cargo, the notice may be invalid. A ship loading grain, fertilizer, cement, coal, steel, or other sensitive bulk cargo must satisfy the standard required by the charterparty and by the cargo itself.

Readiness does not require the ship to be perfect in every minor respect. The practical question is whether the ship is ready to commence the contractual cargo operation. If a defect prevents loading or discharge from beginning, or would prevent compliance with the charterer’s orders, the ship is unlikely to be physically ready.

Legal Readiness of the Ship

Legal readiness means that the ship has obtained the clearances, permissions, and documents required before cargo operations may lawfully start. These may include free pratique, customs clearance, immigration clearance, port authority permission, dangerous cargo approvals, phytosanitary clearance, or other local requirements depending on the port and cargo.

The charterparty may modify the effect of legal readiness by using phrases such as WICCON (Whether Customs Cleared Or Not) or WIFPON (Whether In Free Pratique Or Not). These clauses may permit Notice of Readiness (NOR) to be tendered before customs clearance or free pratique has been formally granted, provided the wording is sufficiently clear and the ship is otherwise ready.

However, these phrases should not be used casually. If local law or port practice prevents cargo operations from starting until a particular clearance is obtained, disputes may arise as to whether the ship was genuinely ready. Charterparty wording must be read together with the facts at the port.

WIBON, WIPON, WICCON, and WIFPON

Voyage charterparties often contain special expressions that affect the commencement of laytime. These phrases are designed to reduce disputes when the ship is prevented from reaching the berth or completing formalities for reasons outside the shipowner’s control.

1. WIBON means Whether In Berth Or Not. It may allow Notice of Readiness (NOR) to be tendered even if the ship has not reached the berth, usually because the berth is unavailable.
2. WIPON means Whether In Port Or Not. It may allow Notice of Readiness (NOR) to be tendered from a customary waiting place outside the strict port area, depending on the wording and circumstances.
3. WICCON means Whether Customs Cleared Or Not. It may allow Notice of Readiness (NOR) before customs clearance has been completed.
4. WIFPON means Whether In Free Pratique Or Not. It may allow Notice of Readiness (NOR) before free pratique has been granted.

These expressions are commercially useful, but they do not automatically solve every problem. Their effect depends on the full wording of the charterparty, the type of charter, the place where the ship is waiting, the cause of the delay, and whether the ship is otherwise ready. For example, WIBON may assist where the berth is occupied, but it may not assist if the ship is unable to reach the berth because of bad weather, insufficient draft, or another navigational restriction unless the clause clearly covers that situation.

Office Hours and Valid Tendering of NOR

Many charterparties restrict the tendering of Notice of Readiness (NOR) to specified hours. A clause may state that NOR can be tendered between 08:00 and 17:00 on weekdays, excluding Saturdays, Sundays, and holidays. If NOR is tendered outside the permitted time, the charterparty may treat it as tendered at the next valid time, or it may require a fresh notice. The answer depends on the wording.

For example, if Notice of Readiness (NOR) is tendered at 19:00 on Thursday and Friday is a holiday, while Saturday and Sunday are excluded, the earliest contractual tendering time may be Monday at 08:00. The notice time will then be calculated from that time, not from Thursday evening, unless the charterparty provides otherwise.

Another common clause provides that laytime commences at 13:00 if Notice of Readiness (NOR) is validly tendered before noon, and at 08:00 on the next working day if Notice of Readiness (NOR) is validly tendered after noon. Under this type of clause, a notice tendered at 11:50 may start laytime the same day, while a notice tendered at 12:01 may postpone the start of laytime until the next working day.

Invalid Notice of Readiness (NOR)

An invalid Notice of Readiness (NOR) can have serious commercial consequences. If the ship is not an arrived ship, or is not physically or legally ready, the notice may fail to start laytime. The shipowner may then lose time that would otherwise have counted and may also lose a demurrage claim.

The problem is illustrated by The Mexico 1. In that case, a notice was tendered when the ship was not truly ready to discharge. The Notice of Readiness (NOR) was held invalid. Unless some later event caused laytime to begin, laytime did not start merely because the notice had been served. The case is a warning that a document labelled Notice of Readiness (NOR) is not enough. The factual statement contained in the notice must be true when the notice is tendered.

In some cases, charterers may waive an invalid notice by accepting it, acting upon it, or allowing cargo operations to proceed without objection. However, waiver is fact-sensitive and should not be assumed. Shipowners should avoid relying on waiver when a fresh valid Notice of Readiness (NOR) can be tendered safely.

The Happy Day and Commencement by Conduct

English law has also considered situations where a Notice of Readiness (NOR) was invalid, but cargo operations later began. In practical terms, if charterers commence loading or discharge with knowledge of the facts and without reservation, an argument may arise that laytime has started by waiver, estoppel, or agreement. However, these arguments depend heavily on the facts and the charterparty wording.

The safer commercial practice is clear. If there is any doubt about the validity of the first Notice of Readiness (NOR), the master or agent should tender a fresh Notice of Readiness (NOR) as soon as the ship is unquestionably arrived and ready. A fresh notice may prevent a later argument that laytime never began or began later than the shipowner claims.

Laytime Before Laydays and Early Arrival

If a ship arrives before the first layday, the charterers are generally not obliged to start loading or discharging before the laydays begin. The ship may wait until the agreed laycan opens unless the charterers agree to use the ship earlier. If cargo operations begin before the laydays, the charterparty should be checked carefully to determine whether time counts immediately, whether it counts only if used, or whether laytime commences only from the first layday.

Early arrival may be commercially helpful if the berth, cargo, and receivers are ready. However, early arrival does not automatically impose an obligation on the charterer to commence cargo operations. The laycan protects both parties: it gives the shipowner a window in which to present the ship and gives the charterer a period during which the cargo and port arrangements must be ready.

If the ship arrives after the cancelling date, the charterer may have the right to cancel the charterparty, depending on the cancelling clause. The shipowner may still tender Notice of Readiness (NOR), but the charterer’s cancellation right must be dealt with separately from the laytime calculation.

Types of Laytime

After laytime has commenced, the next question is how much time the charterer is allowed. Laytime may be fixed, calculable, or expressed in more flexible terms.

Fixed Laytime

Fixed laytime gives a specified period for loading, discharging, or both. For example, the charterparty may allow 36 hours for loading and 48 hours for discharging. This type of laytime is usually the easiest to calculate, provided the commencement time and exceptions are clear.

Calculable Laytime

Calculable laytime is based on a cargo-handling rate. For example, if a ship is to load 100,000 metric tons at 10,000 metric tons per weather working day, the basic laytime allowance is 10 days, subject to the charterparty definition of day, weather working day, holidays, interruptions, and other exceptions.

Calculable laytime can become complex when different loading and discharging rates apply, when rates are expressed per hatch, per workable hatch, per crane, per weather working day, or when cargo is loaded or discharged at multiple berths or ports.

Customary Quick Despatch (CQD), Customary Despatch, and Custom of the Port

Terms such as Customary Quick Despatch (CQD), Customary Despatch (CD), Fast As Can, and Custom of the Port do not usually provide a precise number of hours or days. Instead, they require cargo operations to be performed with reasonable speed according to the circumstances of the port, cargo, equipment, labour, weather, and local practice.

Shipowners often dislike these expressions because they create uncertainty. If no fixed or calculable laytime is agreed, it may be difficult to determine exactly when the charterer is in delay and when demurrage or damages become recoverable. For charterers, however, these terms may provide flexibility where port operations depend heavily on local custom or unpredictable operational conditions.

Customary Quick Despatch (CQD)

Customary Quick Despatch (CQD) means that the charterer must load or discharge as quickly as can reasonably be expected in the circumstances of the port. It does not mean that cargo operations must be carried out at any cost or without regard to safety. It requires reasonable expedition according to the ordinary practice and capacity of the port.

Because Customary Quick Despatch (CQD) does not provide a fixed laytime allowance, disputes may arise over whether the charterer acted quickly enough. Evidence of port practice, available labour, equipment, weather interruptions, congestion, and normal cargo-handling rates may become important.

Fast As Can

Fast As Can is another expression used in charterparties to describe the speed of loading or discharging. It requires the cargo operation to be performed as quickly as reasonably possible, taking into account safety, available equipment, cargo characteristics, port restrictions, labour, and the condition of the ship.

The phrase should not be read as an instruction to rush cargo operations dangerously. Loading or discharging must still be carried out safely and lawfully. Poorly drafted “fast as can” wording may produce disputes because the obligation is practical rather than mathematical.

Custom of the Port

Custom of the Port refers to established local practice at a particular port. This may include working hours, holiday practice, use of shore equipment, order of berthing, cargo-handling arrangements, documentary procedures, or other port routines. If the charterparty incorporates custom of the port, the parties may need evidence of that custom to determine the charterer’s obligation.

Port custom must be sufficiently certain, reasonable, and established. A mere habit or occasional practice may not be enough. In laytime disputes, parties should be cautious when relying on unwritten local practices unless those practices can be proven by agents, terminal operators, port regulations, or historical evidence.

Interruptions and Exceptions to Laytime

Once laytime has commenced, it usually runs continuously unless the charterparty provides for interruptions or exceptions. Common exceptions include Sundays, holidays, bad weather, strikes, port authority restrictions, shifting, breakdowns, and other agreed periods.

Typical laytime expressions include:

1. SHEX: Sundays and Holidays Excepted.
2. SHINC: Sundays and Holidays Included.
3. WWD: Weather Working Day.
4. WWDSHEX: Weather Working Days, Sundays and Holidays Excepted.
5. Unless Used (UU): excepted time counts if actually used for cargo operations.
6. Even If Used (EIU): excepted time does not count even if cargo operations take place.

The effect of an interruption depends on the exact wording. If Sundays and holidays are excepted, they do not count as laytime unless the clause says “unless used” or similar wording. If the ship is already on demurrage, ordinary laytime exceptions may no longer apply unless the charterparty clearly provides otherwise.

Unless Used (UU) and Even If Used (EIU)

Unless Used (UU) means that an excepted period will not count as laytime unless cargo operations are actually carried out during that period. If the charterparty says Sundays and holidays are excepted unless used, then work performed during those excluded days will count, at least to the extent provided by the clause.

Even If Used (EIU) has the opposite effect. It protects the charterer by providing that an excepted period will not count even if the time is used for loading or discharging. A compromise wording may state that only half of the actual time used during Sundays or holidays will count as laytime.

These expressions should be drafted carefully because small wording differences can materially affect the final time sheet and the demurrage calculation.

Demurrage, Despatch, and the End of Laytime

If the charterer uses more than the agreed laytime, the ship goes on demurrage. Demurrage is a pre-agreed daily or hourly amount payable by the charterer to the shipowner for detention of the ship beyond the permitted laytime. It is usually calculated pro rata for part of a day.

If the charterer completes loading or discharging before the allowed laytime expires, the charterer may be entitled to despatch, but only if the charterparty provides for it. Despatch is often fixed at half the demurrage rate, although the parties may agree another basis. Some charterparties provide no despatch at all.

The familiar expression “once on demurrage, always on demurrage” means that, after laytime has expired, laytime exceptions usually cease to protect the charterer. For example, if Sundays and holidays were excluded from laytime, they may still count as demurrage after the ship is already on demurrage. This principle is subject to the charterparty wording and to exceptions such as delay caused by the shipowner’s fault.

Detention After Cargo Operations

Detention is different from demurrage. Demurrage concerns delay during loading or discharging after laytime has expired. Detention may arise where the ship is delayed outside the laytime and demurrage regime, for example after completion of cargo operations because documents are not ready, port clearance is delayed due to charterer’s fault, or the ship is otherwise prevented from sailing.

Demurrage is liquidated damages at the contractual rate. Detention is usually an unliquidated claim for the actual loss suffered by the shipowner. This may include lost time, lost employment, additional port costs, bunkers, or other proven losses, subject to causation and remoteness.

Demurrage Claim Documents

A demurrage claim is only as strong as the documents supporting it. The charterparty may require the claim to be submitted within a strict time limit and accompanied by specified documents. If the claim is late or incomplete, it may be time-barred even if the calculation is otherwise correct.

Common demurrage claim documents include:

1. Statement of Facts (SOF)
2. Time Sheet
3. Notice of Readiness (NOR)
4. Port log or agent’s statement
5. Letters of protest, if any
6. Cargo documents and loading or discharge records
7. Demurrage invoice
8. Supporting weather records, where weather exceptions are disputed

Under English law, the general limitation period for contractual claims may be longer, but many voyage charterparties shorten the demurrage claim period to 90 days, 60 days, 45 days, or another agreed period. If the charterparty imposes a document deadline, the shipowner must comply exactly.

Practical Guidance for Shipowners

Shipowners should ensure that the master and agents understand the laytime clause before arrival. The master should know where Notice of Readiness (NOR) may be tendered, to whom it must be sent, during which hours it may be served, and what clearances are required. If there is any doubt about readiness, the shipowner should avoid premature tendering or should re-tender Notice of Readiness (NOR) once the ship is unquestionably ready.

Shipowners should also preserve evidence. Accurate arrival records, anchorage times, port authority instructions, free pratique details, customs clearance, hold inspection results, cargo readiness, weather stoppages, and shifting records may be decisive in a later demurrage dispute.

Practical Guidance for Charterers

Charterers should check whether the Notice of Readiness (NOR) is valid before accepting that laytime has commenced. If the ship has not reached the agreed place, is not ready, lacks required clearances, or tenders notice outside permitted hours, charterers should reserve rights immediately. Silence or conduct may later be argued as acceptance or waiver.

Charterers should also ensure that the Statement of Facts accurately records all relevant events. A careless Statement of Facts may create difficulty when preparing or defending a demurrage claim. Weather interruptions, shore stoppages, strikes, equipment breakdowns, holidays, shifting, and waiting-for-berth periods should be recorded precisely.

Commercial Importance of Commencement of Laytime

The commencement of laytime is not a theoretical legal point. It determines how port time is allocated between shipowner and charterer. In a congested port, a difference of one day in the commencement of laytime can decide whether a voyage is profitable or loss-making. In high freight markets, the financial effect can be substantial.

For shipowners, an early and valid start to laytime protects the earning capacity of the ship. For charterers, strict control of Notice of Readiness (NOR), readiness, and laytime exceptions prevents unjustified demurrage exposure. For shipbrokers and operators, accurate drafting at the fixture stage reduces disputes after the voyage.

Clear charterparty wording, careful arrival procedures, accurate Notice of Readiness (NOR), and disciplined time-sheet preparation are the best safeguards against laytime disputes. In voyage chartering, the laytime clock should never be allowed to start by assumption. It starts when the contract says it starts, and the facts must support the notice that triggers it.