Laycan

When a charterer quotes a cargo perhaps the worst scenario is that no ships offer for the business. This would be rare in the major bulk trades but, for those involved in the coastal or middle trades, such an event is not unknown. The other scenario, which is a major source of trouble, is when the ship as fixed does not arrive, or indeed does not arrive in time to load the cargo. The purchase contracts for the charterers’ cargoes will state that a cargo must be loaded within certain dates, or even on a given day in some tanker loading ports. Penalties are likely to accrue against the charterer if the vessel does not arrive timeously for loading. The charterers therefore need to be able to cancel a ship that is running late so that they are able to find a commercial solution such as fixing an alternative, earlier vessel as a substitute. It is perhaps unseemly to point out that the charterers may at times, in a falling market, use the ploy to cancel a more costly vessel to enable them to fix a cheaper alternative. It may be cynical to ask is a ship ever cancelled for being late if the market has risen since the original fixture was concluded. Thus it is necessary, these days, for a voyage charter to be negotiated with a ‘Laydays/Cancelling'(Laycan). In dry cargo trades the dates could be as wide as 10 or 15 days, say 1/10 April or 1/15 April. In the oil trades it is common for the sale contract to have a 48-hour supply window so we would see the business quoted as 1/3 April. At first view this appears to be three days, 1, 2 and 3 April – but on closer scrutiny the sale contract states 12.00 hrs 1st to 12.00 hrs 3rd which is 48 hours. The charterers, under the terms agreed with the owner in the charterparty, may take the risk of the vessel arriving before 12.00 hrs on the 1st and indeed arriving after 12.00 hrs on the 3rd. However Shellvoy6 has a commencing and cancelling time of 12.00 hrs on the unamended form.  Accepting that the charterers need the right to cancel a ship that is running late, or perhaps more accurately will not be ready within the cancelling time/date it may be no surprise to the student that various charters have different ways of dealing with late readiness.