Address Commissions on Despatch Money

Despatch: It is very often agreed that if a vessel completes cargo operations within the available laytime, the charterer will be rewarded by the payment of despatch money, which is normally set at half the daily rate of demurrage. It should be borne in mind, however, that a few charterers negotiate that daily despatch is the same as daily demurrage, while, by contrast, for vessels that normally might expect a fast turn-round in port – e.g. ro-ro ships, car carriers, or coasters – it is not at all unusual for the contract to specify ‘free despatch’ – i.e. no despatch at all. However, no address commissions or brokerages are payable on despatch money. Where despatch is payable, it can be sub-divided as being payable on: All time saved, or on Working time, or laytime saved. It is perhaps easier to understand despatch on ‘all time saved’ by the use of an example. The ‘HERON’ completes loading at 1200 hours on a Friday, her charterparty being ‘per weather working day of 24 consecutive hours, Saturdays, Sundays and Holidays excepted, even if used’. Thus laytime would be suspended in normal circumstances from Friday 2400 hours through to Monday 0001 hours. At 1200 hours on Friday there are 3 days of laytime remaining and, since the term ‘all time saved’ means exactly what it says, the calculator of laytime has to base figures on the hypothetical case that “if the vessel had not completed loading on the Friday at 1200 hours, but had remained in port working cargo. Allowing for the weekend that has been ‘saved’ by the charterers due to their finishing before the expiry of permitted laytime, they have in effect ‘saved’ the shipowner some 5 days and, under ‘all time saved’ terms, are thus entitled to 5 days despatch. Using the same example, but on the basis of ‘working time’ or ‘laytime saved’, only the 3 remaining days of laytime would apply as despatch, despite weekends or holidays or bad weather or any other factor occurring once the ship had departed.