Laytime Calculation

Laytime is the period of time within which the loading or discharging operation is required to be successfully completed according to the charter-party. Laytime is at the charterer’s free disposal in other words laytime is already included in the freight calculations. If laytime period is exceeded, charterer will have to pay remuneration to the shipowner in the form of demurrage or damages for detention. Obviously, it is for the benefit of the charterer’s interest for the laytime period to be as broad as possible in order to take into account for unexpected events. Contrarily, it is to the economic advantage of the shipowner to have a prompt port turn-round and therefore shipowner is frequently prepared to offer an inducement to the charterer in the form of dispatch money if the loading or discharging operation can be completed in a short period of time.

Laytime Calculation 

In charter-party, period of laytime is unambiguously specified either as a specific number of days or as a fixed loading or discharge rate. Frequently, laytime period wording is less specific such as:

  • Customary Dispatch
  • As Fast As Ship Can Receive

These kind of laytime period phrases are interpreted as imposing an obligation to load within a reasonable time according to the custom of the port and the charterer is expected to exercise reasonable dispatch in administering the operation.

If laytime is indicated as a certain number of days or running days, this is interpreted by the courts as meaning consecutive periods of 24 hours running without interruption except in the case where specific days are excluded such as SHEX (Sundays and Holidays Excepted).

In charter-party, if excepted periods of laytime is not stipulated, then laytime would run continuously through Sundays, holidays and other periods such as Saturday afternoons, during which it was not customary to work in the port. Excepted periods of laytime is considered as a nutshell expression for the computation of average loading time. It is unimportant that excepted periods of laytime may be illegal to work on some of these days at a particular port. Conventionally, laytime periods of 24 hours were regarded as calendar days running from midnight, but under modern forms of charter-party laytime periods will be treated as artificial or conventional days of 24 hours starting from the time when the NOR (Notice of Readiness) commences.

Alternative way of explaining laytime is in the form of working days. A working day is a day on which work is ordinarily done in the particular port, excluding Sundays and holidays (Fridays in Muslim countries). A working day describes the character of the day as a whole, and consequently the day will count even though the charterer does not intend to load on that day or is obstructed Saturday from using due to bad weather, unless bad weather condition is covered by an exception. Number of hours in a particular working day on which a ship is required to load will depend on the custom of the port. Generally, Saturday will normally count as a whole day although may not be customary to work in the afternoon.

Weather Working Day phrase is a further improvement, excluding from the calculation of laytime those working days on which loading would have been prevented by bad weather, had any loading been envisaged at that time. It is unimportant that the charterer had no intention of loading during such periods, since “the status of a day as being a weather working day, wholly or in part or not at all, is determined solely by its own weather and not by extraneous factors such as the actions, intentions and plans of any person”. If only a part of the working day is affected by bad weather, a suitable deduction from the laytime will be made in proportion to the length of the suspension. In a broad sense, the word weather is interpreted by the courts and has been held to cover not only rain and gusts but also stack of ice which prevented loading. Contrarily, weather must influence the loading process and not simply the safety of the ship. Consequently, mere threat of bad weather, which resulted in a ship being ordered from the berth by the harbor master, did not prevent the period in question from counting as weather working days. Different method of evaluation which is progressively used in modern standardized forms is to base the calculation of laytime on a specified daily rate of loading or discharging such as 5,000 metric tons per weather working day. Number of lay days is then determined by dividing the total amount of cargo by the daily rate. Any resulting fraction must be treated as an appropriate fraction of the working day and will not permit the charterer to an extra full day. Frequently, lay days calculation is qualified by being expressed as:

  • Daily Rate Per Hatch
  • Daily Rate Per Workable Hatch

In Daily Rate Per Hatch, overall rate is calculated by multiplying the daily rate by the number of hatches, but the calculation of Daily Rate Per Workable Hatch is not so simple. Working Hatch term is used to indicate a hatch which can be worked either because under that hatch there is a hold into which cargo can be loaded or discharged. Once the hold has been loaded or discharged, that hatch ceases to be a working hatch. Thus, average daily quantity to be loaded into or discharged from the ship cannot be determined until the loading or discharging operations have begun, and may vary as those operations proceed. If all the hatches remain workable throughout the loading or discharging operation, then calculation will be moderately simple, since calculation can then be assessed in relation to the time taken to load or discharge the largest hold.