End of Lay Time in Ship Chartering

End of Lay Time is a critical point in voyage chartering because it determines when the Charterer’s permitted time for cargo operations has been fully used, when demurrage may begin, or when despatch may become payable. Laytime is the period agreed in the Charter Party during which Charterers may load or discharge cargo without paying extra compensation to Shipowners. Once that period ends, the commercial balance changes: if cargo operations are still continuing, the ship is usually on demurrage; if cargo operations finish early and the Charter Party allows it, despatch may be payable.

In simple terms, laytime ends when the cargo work for which laytime was allowed has been completed or when the agreed laytime has expired, depending on the circumstances. In practice, however, the end of laytime can become a complicated issue because cargo operations may be followed by trimming, stowing, lashing, draft surveys, documentation, customs formalities, fumigation, port clearance, cargo disputes, banking delays, or government inspections. Whether those periods count as laytime, demurrage, excluded time, or post-cargo operational delay depends on the Charter Party wording and the factual cause of the delay.

Once cargo operations are completed, the ship should normally proceed with the voyage for which she has been chartered. After loading, the ship should sail toward the discharge port. After discharge, the ship should become free for her next employment, subject to the Charter Party and operational requirements. However, immediate sailing or release may not always be possible. Further formalities may be required in port, and such formalities may affect the laytime calculation if they are connected with cargo operations or with Charterers’ obligations.

Examples of post-cargo formalities include securing cargo, lashing cargo, trimming bulk cargo, stowing break bulk cargo, completing draft surveys, finalizing Bills of Lading, resolving cargo quantity disputes, obtaining customs clearance, meeting port authority requirements, satisfying banking documentary requirements, dealing with receiver disputes, or waiting for cargo documents. Some of these activities may be part of cargo operations. Others may be independent delays. The legal and commercial result depends on whether the Charter Party allocates the risk clearly.

What Is Laytime?

Laytime is the time allowed by the Charter Party for loading and discharging cargo. It is one of the most important terms in voyage chartering because the Shipowner earns freight for the voyage but allows the Charterer a fixed or calculable period to use the ship for cargo operations. If Charterers use more than the permitted time, demurrage may be payable. If Charterers use less than the permitted time and the Charter Party provides for it, despatch may be payable.

Laytime may be expressed in several ways. It may be stated as a fixed number of days or hours. It may be calculated by loading or discharging rate, such as “10,000 metric tons per weather working day.” It may be reversible between loading and discharging ports. It may be averaged. It may be based on a custom of the port or an agreed formula. The end of laytime cannot be understood without first identifying how laytime begins and how the allowed time is measured.

Lay Day and Laytime

Laytime and lay day are related but not identical expressions. Laytime: Laytime is the total period contractually allowed for cargo operations. It is the time bank available to Charterers for loading and discharging. Lay Day: Lay day is often used to refer to an individual day within the laytime period, although in some chartering discussions it may be used loosely. The exact wording of the Charter Party should always be followed.

Laytime is the broader contractual concept. Lay days are the units into which laytime may be divided. For example, if a Charter Party allows five weather working days for loading, each qualifying day or part of a day is counted according to the agreed laytime wording. The end of laytime occurs when the allowed amount of countable time has been exhausted or when cargo operations have been completed before exhaustion of time.

Notice of Readiness (NOR) and Laytime Commencement

Before laytime can end, it must first begin. The starting point is usually linked to the Notice of Readiness (NOR). The Notice of Readiness is the notice given by the master or Shipowners’ agent stating that the ship has arrived at the contractual destination and is ready in all respects to load or discharge cargo. Valid tender of Notice of Readiness is one of the most important events in voyage chartering.

Laytime usually begins after a valid Notice of Readiness has been tendered and after any agreed notice period has expired. This notice period may be six hours, twelve hours, twenty-four hours, or another period stated in the Charter Party. Some Charter Parties provide that laytime begins at a particular time after NOR is given, such as at 0800 hours on the next working day, at 1400 hours if NOR is tendered before noon, or after office hours depending on local practice and contract wording.

If the NOR is invalid, laytime may not begin. Invalid NOR issues may arise where the ship has not arrived at the agreed place, is not physically ready, is not legally ready, lacks free pratique where required, has unclean holds, cannot load because of ship-related problems, or has not complied with contract requirements. If laytime never properly begins, the calculation of its end becomes disputed.

End of Lay Time

End of Lay Time usually occurs when the allowed laytime has been completely used or when cargo operations are completed before the allowed laytime expires. The practical meaning depends on whether the ship is still working cargo at that moment.

If cargo operations are still continuing when laytime expires, the ship enters demurrage unless an exception or special clause prevents demurrage from running. Demurrage is the agreed compensation payable by Charterers for detaining the ship beyond allowed laytime. If cargo operations are completed before laytime expires and the Charter Party provides for despatch, Shipowners may owe despatch to Charterers for saved time.

Laytime ends upon completion of cargo operations in the sense that Charterers no longer need the ship for loading or discharging. However, if the allowed laytime has already expired before completion, the ship is on demurrage until cargo operations and any contractually relevant associated operations are completed. Therefore, the phrase “end of laytime” may refer either to the exhaustion of the allowed time or to the completion of the cargo work. Careful wording is needed.

Completion of Cargo Operations

The most common event connected with the end of laytime is the completion of cargo operations. Loading is completed when all cargo has been loaded in accordance with the Charter Party. Discharging is completed when all cargo has been discharged from the ship according to the contract. However, cargo operations may include more than simply placing cargo into the hold or removing cargo from the hold.

In dry bulk shipping, loading may not be complete until the cargo has been properly trimmed where trimming is required. In break bulk or project cargo, loading may not be complete until cargo is properly stowed and secured. In container or deck cargo operations, lashing may be essential before the ship can sail. If the cargo is not safe for sea, the ship may not be ready to proceed even though the physical loading has ended.

Once started, cargo operations should generally continue uninterrupted until cargo is fully loaded or discharged, or until the available laytime is exhausted. Interruptions may occur because of weather, strikes, equipment breakdown, cargo shortage, berth congestion, draft surveys, customs delays, or ship-related problems. Whether these interruptions count depends on the Charter Party terms.

Demurrage and Despatch

Demurrage and despatch are the financial consequences most closely associated with the end of laytime.

Demurrage: Demurrage is the amount payable by Charterers to Shipowners when Charterers exceed the agreed laytime. It is usually agreed as a daily rate or hourly equivalent. Demurrage compensates Shipowners for the ship’s detention after laytime has expired.
Despatch: Despatch is the amount payable by Shipowners to Charterers if cargo operations are completed before the allowed laytime expires and the Charter Party provides for despatch. Despatch is often calculated at half the demurrage rate, although the Charter Party may provide another basis.

Demurrage is not a penalty in the ordinary commercial sense; it is usually treated as agreed damages for detention. Despatch is an incentive for efficient cargo operations. Both depend on correct laytime calculation, accurate Statements of Facts, and precise application of Charter Party clauses.

Calculating the End of Lay Time

Calculating the End of Lay Time requires a structured approach. The calculation must identify when laytime starts, how much laytime is allowed, which periods count, which periods are excluded, and when the allowed time is exhausted or cargo operations are completed.

Establish the Laytime Commencement: Identify the moment laytime begins under the Charter Party. This normally follows valid tender of Notice of Readiness and expiry of any agreed notice period.
Determine the Agreed Lay Time: Identify the amount of laytime allowed. It may be fixed in days or hours, or calculated according to cargo quantity and loading/discharging rates.
Identify Exclusions: Determine which periods do not count. These may include Sundays, holidays, bad weather periods, strikes, breakdowns, or other excepted periods depending on wording.
Calculate Time Used: Add all countable time from the laytime starting point. Exclude only periods that the Charter Party clearly excludes.
Determine the End of Lay Time: The end of laytime occurs when the allowed countable time has been exhausted. If cargo operations finish before that point, there may be despatch if agreed.

For example, assume laytime begins on May 1 at 1200 hours, and the Charter Party allows 48 running hours for loading. If there is no exclusion, laytime expires on May 3 at 1200 hours. If the Charter Party excludes a 24-hour public holiday during the running of laytime, and the holiday is legally excluded by the contract wording, the practical end of laytime moves to May 4 at 1200 hours. If loading finishes before the calculated expiry, despatch may arise if the Charter Party provides for it.

Running Days, Working Days, and Weather Working Days

The end of laytime depends heavily on the type of day used in the Charter Party. “Running days” usually count continuously unless a specific exception applies. “Working days” generally refer to days when work is normally performed at the port. “Weather working days” count only when weather permits cargo operations. The wording may also refer to Sundays and holidays excluded, unless used, or to other formulas.

A clause allowing “five running days” may expire much sooner than a clause allowing “five weather working days, Sundays and holidays excepted.” Therefore, the same cargo operation can produce very different demurrage or despatch results depending on the laytime wording.

Interruptions and Exceptions Before the End of Laytime

Not all delays are counted in the same way. Some interruptions count as laytime. Others are excluded. The Charter Party must be read carefully. If cargo operations stop because of rain and the Charter Party is based on weather working days, the time may be excluded. If cargo operations stop because of the ship’s own gear failure, Charterers may argue that time should not count. If cargo operations stop because cargo is not ready, Shipowners may argue that time counts against Charterers.

Common exclusions or interruptions include:

Rain or bad weather.
Sundays and holidays.
Strikes or labour stoppages.
Port congestion.
Terminal breakdown.
Ship gear breakdown.
Customs or immigration delay.
Draft survey time.
Fumigation time.
Shifting between berths.
Waiting for cargo documents.
Waiting for orders.

Whether these periods count depends on precise wording. General assumptions are dangerous. A laytime exception may apply before demurrage but may not interrupt demurrage after laytime has expired unless the clause clearly says so.

Once on Demurrage, Always on Demurrage

A traditional principle in voyage chartering is often expressed as “once on demurrage, always on demurrage.” This means that once laytime has expired and the ship is on demurrage, laytime exceptions generally no longer stop demurrage unless the Charter Party expressly provides otherwise. The principle is important because a weather exception or holiday exception that stops laytime may not necessarily stop demurrage.

For example, if laytime expires during loading and the ship is then delayed by rain, Charterers may still remain liable for demurrage unless the Charter Party clearly states that demurrage is interrupted by rain. Therefore, determining the end of laytime is commercially important. Once laytime ends by exhaustion, the legal regime changes.

Trimming, Stowing, or Lashing the Cargo may be added to Laytime

Trimming, Stowing, or Lashing the Cargo may be added to Laytime where those activities form part of cargo operations or are required before the ship can safely proceed. Whether the time counts depends on the Charter Party and the nature of the cargo.

Trimming: Trimming is the levelling and distribution of bulk cargo in the ship’s holds. It is especially important for dry bulk cargoes such as coal, grain, ore, fertilizers, and other loose cargoes. Trimming improves stability, reduces cargo shifting risk, and may be required by safety rules or the IMSBC Code.
Stowing: Stowing is the arrangement of cargo in the ship so that space is used efficiently, cargo is protected, and the ship remains safe. Stowing is important for break bulk, steel, timber, bags, project cargo, and other cargoes that must be arranged rather than poured.
Lashing: Lashing is the securing of cargo by wires, chains, ropes, twist locks, stoppers, or other securing devices. Lashing prevents cargo movement during the voyage and is essential for deck cargo, containers, project cargo, heavy lift cargo, and cargo that may shift at sea.

If trimming, stowing, or lashing is necessary for cargo safety and forms part of loading operations, the time spent may count as laytime or demurrage. If the Charter Party clearly states that such time is for Charterers’ account, the position is stronger. If the wording is silent, disputes may arise over whether the work is part of loading or a separate operation.

For example, if the agreed laytime is 48 hours and loading the cargo physically takes 44 hours, but trimming and lashing require another 8 hours before the ship can safely sail, the parties must determine whether the additional 8 hours count. If trimming and lashing are part of Charterers’ loading obligation, laytime may be used and demurrage may start if total time exceeds allowed laytime.

Post-Loading Formalities and End of Laytime

After loading finishes, the ship may still be delayed by documents, cargo disputes, inspections, customs clearance, fumigation, Bills of Lading, bank requirements, or customer instructions. Some of these delays may count against Charterers if they are connected with cargo or Charterers’ commercial arrangements. Others may fall outside laytime depending on the contract.

For instance, if loading is complete but the ship cannot sail because cargo documents are not ready, Shipowners may argue that the ship is being detained by Charterers’ side and that time should count as laytime or demurrage. If delay is caused by port authorities for reasons outside Charterers’ control, the result depends on the Charter Party. Clear clauses reduce disputes.

End of Laytime at Loading Port

At the loading port, laytime usually ends when the agreed loading laytime is exhausted or loading operations, including any required trimming, stowing, lashing, and cargo-related formalities, are complete. If loading finishes before laytime expires, despatch may be payable if the Charter Party provides despatch at loading port. If loading continues beyond the allowed time, demurrage begins.

The loading port end of laytime is especially important because delay at loading affects the entire voyage schedule. A late departure may cause missed discharge windows, higher bunker consumption, weather exposure, or downstream sale contract problems. Accurate recording of loading operations is essential.

End of Laytime at Discharging Port

At the discharging port, laytime ends when discharge laytime is exhausted or discharge operations are completed. If discharge takes longer than allowed, demurrage is payable. If discharge finishes early and despatch applies, Charterers may claim despatch. Discharge completion may involve final grabs, cleaning of holds by receivers, draft survey, cargo tally, or shore-side confirmation depending on the cargo and contract.

Discharge laytime disputes often arise where receivers cannot take cargo, terminal equipment fails, cargo is wet or compacted, discharge rate is slower than expected, or documentation is delayed. The Statement of Facts should record all relevant events clearly.

Completion of Loading or Discharge: What Counts?

Completion of cargo operations should be determined by the commercial and contractual nature of the cargo. For dry bulk cargo, discharge may be complete when all cargo that can be removed by ordinary discharge methods has been discharged, subject to any sweeping or cleaning obligations. For grain or coal, trimming or final hold work may be relevant. For containers or deck cargo, lashing or unlashing may be part of the operation. For tanker cargoes, completion may involve hose disconnection, line clearing, draining, ullage measurement, or documentation depending on the Charter Party.

It is not enough to say “cargo finished” without knowing what the Charter Party treats as cargo operation. The parties should check whether laytime includes loading, trimming, stowing, lashing, securing, unlashing, discharge, stripping, draining, surveying, or documentation.

Laytime and Draft Surveys

Draft surveys are common in dry bulk shipping. They determine cargo quantity by measuring the ship’s drafts before and after loading or discharge. Draft survey time may be disputed in laytime calculations. Some Charter Parties expressly state whether draft survey time counts as laytime. If the draft survey is required for cargo quantity and is part of loading or discharge procedure, Shipowners may argue that it counts. Charterers may argue otherwise if the wording excludes it or if delay is caused by the ship.

The best practice is to state clearly in the Charter Party whether initial and final draft surveys count as laytime or are excluded. If the ship is delayed after completion of cargo operations solely for survey or paperwork, the allocation of that time should be clear.

Laytime and Fumigation

Fumigation is common in grain, agricultural cargo, and some foodstuff trades. The question whether fumigation time counts as laytime depends on the Charter Party and the stage of the operation. If fumigation is required by cargo interests, receivers, local authorities, or the sale contract, the time may be for Charterers’ account unless excluded. If fumigation is required because of ship-related infestation or unclean holds, Shipowners may bear the consequences.

Fumigation may occur before loading, after loading, during voyage, or before discharge. It may delay sailing, cargo access, or discharge. Because fumigants are hazardous, safety procedures and documentation must be followed.

Laytime and Cargo Documents

After loading, the ship may wait for Bills of Lading, mate’s receipts, certificates of origin, phytosanitary certificates, customs documents, bank approvals, letters of credit documentation, or other cargo papers. If the delay is caused by Charterers, shippers, receivers, or cargo interests, Shipowners may claim that time counts as laytime or demurrage.

Document delays can be commercially serious. A ship physically ready to sail but detained for documents is still losing time. Charter Party clauses should identify whether waiting for documents after completion of loading counts as laytime or detention.

Laytime and Port Clearance

Port clearance may be required before a ship can sail. If clearance delay is caused by normal port formalities, the result depends on local practice and Charter Party wording. If clearance is delayed because cargo documents are incomplete, cargo disputes remain unresolved, or Charterers’ agents have not completed formalities, time may be for Charterers’ account. If clearance delay is caused by Shipowners’ documentation or ship deficiencies, the time may not count against Charterers.

Laytime and Cargo Disputes

Cargo disputes may delay sailing or completion. Disputes may involve cargo quantity, quality, damage, shortage, contamination, moisture, or title. If cargo interests, buyers, sellers, banks, or receivers prevent sailing or discharge because of a cargo dispute, the Charter Party should determine who bears the time. In many cases, if the delay arises from Charterers’ cargo arrangements, Shipowners may seek demurrage or detention.

End of Laytime and Detention

Detention is different from demurrage. Demurrage applies after laytime expires where the delay falls within the demurrage regime. Detention may arise where the ship is delayed outside the laytime and demurrage framework, often because Charterers wrongfully detain the ship beyond the agreed operation or after cargo work has finished. Detention damages are usually unliquidated unless the Charter Party provides a rate.

If cargo operations are complete and laytime provisions no longer apply, but the ship is still detained by Charterers’ failure to provide documents, orders, or clearance, Shipowners may claim detention depending on the wording and circumstances. A well-drafted Charter Party may avoid uncertainty by specifying that such time counts as laytime or demurrage.

End of Laytime and Statement of Facts

The Statement of Facts is one of the most important documents for determining the end of laytime. It records the timeline of the port call, including arrival, NOR tender, NOR acceptance, berthing, commencement of cargo operations, stoppages, weather periods, survey times, completion of cargo operations, document completion, and sailing.

To avoid disputes, the Statement of Facts should be accurate, detailed, and signed or acknowledged by relevant parties where possible. It should avoid vague descriptions. For example, instead of “delay due to documents,” it should record who was responsible, what documents were missing, and when they were provided. Instead of “rain,” it should record the start and end time of rain and whether cargo operations were actually prevented.

End of Laytime and Time Sheets

The laytime statement or time sheet uses the Statement of Facts and Charter Party clauses to calculate laytime, demurrage, or despatch. A good time sheet shows when laytime began, which periods counted, which periods were excepted, when laytime expired, when demurrage began, when cargo operations ended, and the final amount due.

Disputes often arise because parties use the same Statement of Facts but apply different interpretations of the Charter Party. One party may exclude rain periods while the other counts them. One party may count draft survey time while the other excludes it. The correct result depends on the contract.

Where can I find the Laytime Definitions For Charter Parties?

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to obtain the original Laytime Definitions For Charter Parties 2013 and other documents. www.bimco.org

Laytime definitions are useful because they provide standardized language for common chartering expressions. However, the Charter Party itself remains the primary contract. If the parties incorporate a specific set of laytime definitions, those definitions may assist interpretation. If they do not, the wording of the Charter Party and applicable law will govern.

Which conditions End the Laytime in Ship Chartering?

Which conditions End the Laytime in Ship Chartering? The end of laytime may be triggered by several events or conditions depending on the Charter Party.

Completion of Cargo Operations: Laytime may end because loading or discharging is completed. If operations finish early and despatch applies, Charterers may be entitled to despatch.
Expiration of Agreed Laytime: If the allowed time is fully used while cargo work continues, laytime ends and demurrage begins.
Mutual Agreement: Shipowners and Charterers may agree to end or vary laytime treatment in response to operational changes.
Force Majeure: Some Charter Parties may suspend or affect laytime because of force majeure events, but this depends on express wording.
Termination of Charter Party: If the Charter Party is lawfully terminated, laytime rights and obligations may end, subject to accrued claims.
Substitution of Another Arrangement: The parties may agree a waiting time, detention, or special arrangement replacing ordinary laytime treatment.

End of Laytime Checklist for Shipowners

Confirm valid Notice of Readiness.
Record laytime commencement precisely.
Maintain accurate Statement of Facts.
Record all stoppages and causes.
Identify weather periods clearly.
Record completion of loading or discharge.
Record trimming, stowing, lashing, or securing time.
Record draft survey time.
Record document delays and responsible parties.
Calculate laytime according to the Charter Party.
Identify the exact moment laytime expires.
Claim demurrage promptly with supporting documents.

End of Laytime Checklist for Charterers

Check whether NOR is valid.
Confirm the correct laytime start time.
Verify allowed laytime.
Identify exclusions under the Charter Party.
Check Sundays, holidays, and weather exceptions.
Review whether trimming, stowing, or lashing time counts.
Review draft survey and fumigation time treatment.
Check whether demurrage has validly started.
Calculate despatch if cargo operations finish early.
Challenge inaccurate Statements of Facts promptly.
Keep terminal and agent evidence.
Respond to demurrage claims within the contractual time limit.

Common Mistakes in End of Laytime Calculations

Common mistakes include using the wrong laytime commencement time, assuming NOR is valid without checking, failing to apply the notice period, excluding weather periods without contractual basis, counting Sundays and holidays incorrectly, ignoring “unless used” wording, failing to record stoppage causes, misunderstanding reversible laytime, and assuming demurrage stops automatically for exceptions.

Another common mistake is treating completion of physical cargo loading as the end of all time counting even when trimming, lashing, documents, or cargo formalities remain. Whether such time counts depends on the Charter Party and the reason the ship is detained.

Conclusion: End of Lay Time

End of Lay Time is one of the most important moments in voyage chartering because it determines whether Charterers remain within their allowed cargo-working time, whether demurrage begins, or whether despatch may be payable. Laytime normally ends when the agreed laytime is exhausted or when cargo operations are completed before the time is exhausted.

In practice, the end of laytime requires careful analysis of Notice of Readiness, laytime commencement, allowed laytime, exclusions, interruptions, cargo completion, trimming, stowing, lashing, surveys, documents, and port formalities. If further work is required with respect to trimming, stowing, or lashing the cargo, the time spent may be added to laytime depending on the Charter Party.

Accurate Statements of Facts, clear Charter Party wording, and disciplined laytime calculation are essential. The end of laytime is not merely an operational timestamp; it is the point at which substantial financial consequences may arise between Shipowners and Charterers.