**Averaged Laytime**

**Separate laytime calculations** must be drawn up for loading and for discharging unless there is an **express clause** in charter-party. In a stringent manner, a saving of time on loading operation cannot be applied to extend the time available for discharging operation unless there is an **express clause** to this effect in the **charterparty**. If there is such an **express clause in charterparty**, there are three (3) ways of achieving this effect:

- Specify Number of Hours/Days
- Averaged Laytime
- Reversible Laytime

In a charter-party, parties can agree to make **no distinction** between time allowed for loading and discharging with an **express clause**. As can be observed in tanker charters, parties simply **specify number of hours** within which the loading and discharging operations, together, must be completed.

In a charter-party, parties can either agree that the two operations (loading/discharging) shall be **averaged (Averaged Laytime)** or shall be **reversible (Reversible Laytime) **with an **express clause**. Occasionally, this is expressed as an **option by the charterers** either to average or to reverse.

In **Averaged Laytime**, charterers have the right to average, charterers may take credit for time saved in one operation and apply it to time **overspent** in the other operation. The setting-off which is done relates to **time used** and not to the value of such time in the form of demurrage or despatch. Generally, the demurrage rate is twice the despatch rate, it is very much in the **charterers’ interest** to credit time saved against excess time used. Averaging can turn the paying party into the party receiving the money.

For example, demurrage rate is $20,000 per day and despatch rate is $10,000 per day. Time saved at the loading port is six (6) days. Excess time used at the discharging port is four (4) days. If the two operations are dealt with **separately**, charterers receive despatch at the load port of $60,000 and pay demurrage at the discharge port of $80,000. The result is that the charterers made a net payment of $20,000. On the other hand, if the charterers were entitled to **average laytime**, charterers would transfer four (4) of the six days (6) saved at the load port to time used at the discharge port. That would mean that charterers were entitled to receive $20,000 by way of **despatch** and had **no liability to pay demurrage**.

In some cases, it is possible for the charterers to lose their **liberty to average laytime**, if charterers act in a manner inconsistent with the intention to exercise such liberty. If charterers were to obtain **payment for load port despatch** by deducting it from freight, it might then be **too late** to set off time saved at the load port against excess time used at the discharge port.

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**What is Averaged Laytime in Ship Chartering?**

In the world of ship chartering, laytime is the period of time agreed between the parties during which the shipowner makes the vessel available for loading or discharging of cargo without any extra cost. This time period is calculated from when the ship is ready to load or unload until the cargo handling operations are completed.

Averaged laytime, also known as average laytime or reversible laytime, is a term that relates to the agreement between the shipowner and the charterer on how the laytime is to be calculated. In an averaged laytime arrangement, the laytime for loading and discharging the cargo are considered as one total time.

For example, if the charter party agreement stipulates a laytime of 5 days for loading and 5 days for discharging, this totals 10 days for the whole voyage. With averaged laytime, if loading took 6 days (1 day more than agreed), but discharging only took 4 days (1 day less than agreed), no demurrage (penalty for exceeding the agreed laytime) would be payable by the charterer, because the total laytime used (6+4=10 days) is still within the total agreed laytime.

This type of arrangement provides some flexibility for the charterer, because it allows for unforeseen delays in either loading or discharging to be compensated by faster operations at the other end of the voyage, without the need for paying extra charges, as long as the total agreed laytime is not exceeded.

It’s important to note, though, that the specifics of laytime calculation can be complex and depend on the terms stipulated in each individual charter party agreement.

**Averaged Laytime Vs Reversible ****Laytime**

Laytime, in maritime commerce, is the amount of time specified in a charter party for loading and unloading the cargo. It is a vital aspect of voyage charter agreements. If the ship is loaded or unloaded in less than the laytime, the charterer may have to pay demurrage (a penalty for delaying the vessel), while if it is done in less time, the shipowner may have to pay dispatch (a reward for loading or unloading quickly). The laytime calculation methods include averaged, reversible, and non-reversible laytime.

**Averaged Laytime**:

Averaged laytime is a type of laytime calculation where the time allowed for loading and discharging operations is averaged. The total laytime for loading and unloading is pooled together and can be used for either operation. It doesn’t matter which operation consumes more time. For example, if the charter party allows five days each for loading and unloading, ten days in total can be used for either operation in any proportion.

**Reversible Laytime**:

Reversible laytime is quite similar to averaged laytime. Here, the laytime allowed for loading can be added to the laytime allowed for discharging and vice versa. But unlike averaged laytime, once one operation (loading or unloading) is completed, the time cannot be reversed. For instance, if five days are allowed for loading and five days for unloading, the total ten days can be used for either operation in any proportion. However, once the loading is completed, any unused laytime cannot be added to the unloading operation.

In conclusion, both averaged and reversible laytime offer a level of flexibility to the charterer by allowing the total laytime to be used interchangeably for loading and discharging operations. However, with reversible laytime, once one operation is completed, the leftover time cannot be transferred to the other operation. On the other hand, averaged laytime allows for a continual average of time until all operations are completed. The choice between the two depends on the specifics of the charter party and the predicted efficiency of cargo operations.

**Averaged Laytime Example 1**

Assume that a vessel is chartered to load cargo at port A and then to discharge it at port B. The charter party agreement allows for three days of laytime at each port, thus a total of six days for both operations (loading and unloading).

However, loading at port A takes four days instead of the expected three days, exceeding the initially agreed time by one day. Usually, in a non-averaged laytime situation, this would lead to the charterer paying a penalty known as demurrage for the extra day.

But in this case, with averaged laytime in place, the extra day spent at port A can be offset if the discharge operation at port B takes less time. So, if the discharge at port B only takes two days, it will balance out the extra day used at port A.

This means, in total, the charterer has used six days for both operations, which is the agreed time in the contract, so no demurrage applies.

Averaged laytime provides flexibility to the charterer, allowing them to average the total time used for loading and discharging operations without incurring additional costs as long as the total time doesn’t exceed the sum of the agreed laytime for both operations.

**Averaged Laytime Example 2**

An example of averaged laytime calculation in the context of maritime shipping.

Firstly, laytime is the amount of time agreed between parties during which the owner will make the vessel available for loading or discharging cargo without incurring demurrage (extra charges). Averaging is a clause sometimes used in charters that allows for the laytime allotted for loading and discharging operations to be averaged out.

Let’s illustrate this with an example.

Charter Party Agreement Details:

- Laytime for loading: 48 hours
- Laytime for discharging: 72 hours
- Demurrage: $2000 per day

Scenario:

- Actual loading time: 72 hours
- Actual discharging time: 36 hours

With an averaged laytime clause in place, we combine the laytime for both loading and discharging, and divide by two. That is, (48 hours for loading + 72 hours for discharging) / 2 = 60 hours average laytime.

Let’s now calculate how this applies to the scenario.

For loading, the vessel took 72 hours which is 12 hours more than the average laytime.

For discharging, the vessel only took 36 hours, which is 24 hours less than the average laytime.

This means that overall, the vessel spent 12 hours – 24 hours = -12 hours compared to the averaged laytime.

Since the result is negative, it means the vessel was quicker overall than the averaged laytime allowed, and therefore no demurrage would be charged.

If the result had been positive (i.e., the vessel took longer than the averaged laytime), that extra time would have been subject to demurrage at the agreed rate.

Please note that different contracts can have different clauses and specifics that might affect this calculation. Always refer to the specifics of your contract for an accurate calculation.

**Averaged Laytime Example 3**

Charter Party Agreement Details:

- Laytime for loading: 24 hours
- Laytime for discharging: 36 hours
- Demurrage: $1500 per day

Scenario:

- Actual loading time: 30 hours
- Actual discharging time: 40 hours

An averaged laytime clause allows us to average the laytime for both loading and discharging. This would be (24 hours for loading + 36 hours for discharging) / 2 = 30 hours average laytime.

Applying this to our scenario, we can calculate:

For loading, the vessel took 30 hours, which is exactly the average laytime. So, no additional time is used here.

For discharging, the vessel took 40 hours, which is 10 hours more than the average laytime.

Therefore, overall, the vessel used 10 hours more than the averaged laytime.

Since the result is positive, it means the vessel took longer overall than the averaged laytime allowed, so demurrage would be charged for these extra hours.

To calculate the demurrage, we need to convert the hours into days, because our rate is per day. There are 24 hours in a day, so 10 hours is 10 / 24 = ~0.42 days.

So the demurrage payable would be 0.42 days * $1500 per day = $630.

Please note that contract specifics can differ and might affect this calculation. Always refer to your contract for accurate calculations.

**Averaged Laytime Calculation Example 4**

How to calculate the average laytime for a shipment with a simple example.

Let’s say a ship has been chartered to load and unload cargo. The charter party agreement stipulates the following:

- Laytime allowed for loading at Port A: 4 days
- Laytime allowed for unloading at Port B: 3 days

However, the actual loading and unloading times were as follows:

- Actual loading time at Port A: 5 days
- Actual unloading time at Port B: 2 days

The average laytime is the average of the allowed laytime at both ports. In this case, it would be:

(4 days at Port A + 3 days at Port B) / 2 = 3.5 days

On the other hand, the actual time spent is the sum of the time spent at both ports:

5 days at Port A + 2 days at Port B = 7 days

If the actual time spent is greater than the average laytime, demurrage is due. If the actual time spent is less than the average laytime, dispatch is due.

In our example, the actual time spent (7 days) is greater than the average laytime (3.5 days). Therefore, demurrage is due. The amount of demurrage due would depend on the rate stipulated in the charter party agreement.

It’s important to note that laytime calculations can become complex depending on the terms of the charter party agreement. Other factors that may need to be considered include exceptions to laytime, like weather delays or strikes. Always make sure to refer to the specific terms of the charter party agreement when calculating laytime.

**Averaged Laytime Calculation Example 5**

The laytime is the period of time agreed between the parties during which the owner will make the vessel available for loading or discharging without incurring demurrage. Demurrage is a penalty for exceeding the laytime.

Let’s say, for example, that we have a vessel carrying grain from the port of Houston to the port of Rotterdam. The charter party agreement stipulates an allowed laytime of 72 hours for loading and 48 hours for discharging.

**Loading in Houston:** The vessel arrives on the 1st of June at 0800 hours but due to port congestion, it only starts loading on the 2nd of June at 1800 hours. The vessel finishes loading on the 4th of June at 1200 hours.

To calculate the laytime used for loading:

- Start of laytime: June 2, 1800
- End of laytime: June 4, 1200
- Total laytime used for loading: 42 hours (from June 2, 1800 to June 4, 1200)

**Discharging in Rotterdam:** The vessel arrives in Rotterdam on the 10th of June at 2200 hours. It starts discharging on the 11th of June at 0600 hours and finishes discharging on the 13th of June at 1000 hours.

To calculate the laytime used for discharging:

- Start of laytime: June 11, 0600
- End of laytime: June 13, 1000
- Total laytime used for discharging: 52 hours (from June 11, 0600 to June 13, 1000)

**Average Laytime Calculation:** To calculate the average laytime, we add the allowed laytime for both loading and discharging, then divide by two.

- Allowed laytime for loading: 72 hours
- Allowed laytime for discharging: 48 hours

Average allowed laytime = (72 + 48) / 2 = 60 hours

This average laytime can be used to calculate demurrage if the total time used (94 hours in this case) exceeds the total allowed laytime. This would be calculated on the basis of the agreed demurrage rate in the charter party.

**Averaged Laytime Calculation Example 6**

Here’s an example to help you understand how to calculate averaged laytime:

Let’s say a vessel arrives at a port to load or discharge cargo. The charter party agreement specifies that the laytime allowed for the operation is 72 hours, and any excess time will be considered demurrage.

During the operation, the vessel experiences certain delays due to various reasons. Here’s a breakdown of the delays and their durations:

Delay 1: Weather delay – 10 hours Delay 2: Mechanical breakdown – 5 hours Delay 3: Port congestion – 8 hours Delay 4: Customs inspection – 3 hours

To calculate the averaged laytime, we need to subtract the total duration of the delays from the initially allowed laytime.

Total delay time = 10 hours + 5 hours + 8 hours + 3 hours = 26 hours

Averaged laytime = Allowed laytime – Total delay time Averaged laytime = 72 hours – 26 hours Averaged laytime = 46 hours

Therefore, based on the delays experienced during the operation, the vessel’s averaged laytime is 46 hours. If the total time taken for loading or discharging cargo exceeds this averaged laytime, demurrage charges may be incurred for the excess time.

It’s important to note that this is just a simplified example, and in actual scenarios, there might be additional factors, contractual terms, and specific formulas used to calculate the averaged laytime.