Laytime Calculation Examples: Demurrage, Despatch, NOR, and Charter Party Time Counting

Laytime Calculation Examples: Demurrage, Despatch, NOR, and Charter Party Time Counting

Laytime is one of the central time-counting mechanisms in a voyage charterparty. It is the agreed period during which the shipowner makes the ship available at the loading or discharging port without any payment beyond the freight. During that period, the charterer is expected to complete cargo operations within the time allowed by the charterparty.

If cargo operations take longer than the agreed laytime, the charterer may become liable for demurrage. If cargo operations are completed faster than the allowed time, the charterer may be entitled to despatch, provided that the charterparty contains a despatch provision. For this reason, laytime calculation is not merely an administrative exercise. It directly affects freight economics, voyage profitability, claims handling, and the final settlement between the shipowner and the charterer.

Laytime can be expressed in several ways. A charterparty may allow a fixed number of hours or days, such as 48 hours for loading and 72 hours for discharging. Alternatively, laytime may be calculated by reference to a cargo handling rate, such as 5,000 metric tons per weather working day. In some trades, the wording may refer to customary despatch, customary quick despatch, or loading and discharging as fast as the ship can receive or deliver. Each expression has a different commercial and legal effect, and the exact charterparty wording must always be checked before the calculation is prepared.

In practice, a laytime calculation begins with the statement of facts. The statement of facts records the ship’s arrival, tendering of Notice of Readiness, berthing, commencement and completion of cargo operations, stoppages, weather interruptions, holidays, shifting time, waiting time, and final departure. The laytime statement then converts those facts into counted time, excluded time, demurrage, or despatch according to the charterparty terms.

Laytime Calculation

Laytime is usually stated in the charterparty as either a fixed allowance or a loading/discharging rate. If laytime is given as a definite number of days or running days, the ordinary meaning is continuous periods of 24 hours, unless the charterparty expressly excludes particular days or periods. Therefore, unless there is a qualifying expression such as SHEX, SSHEX, FHEX, or weather working days, time may continue to count through weekends, holidays, night hours, or local non-working periods.

Modern laytime practice normally starts from the time when a valid Notice of Readiness has been tendered and any agreed notice time has expired. The older idea of measuring days only from midnight is less important in modern chartering practice, because most charterparties calculate laytime by hours, fractions of days, or pro-rata periods starting from the contractual commencement point.

Where the charterparty uses working days, only days on which cargo work is normally performed at the relevant port are counted, subject to the wording of the charterparty. In many ports, Sundays and public holidays are excluded unless the charterparty says otherwise. In some countries, local religious or public rest days may also affect the calculation. The difficulty is that a working day is not always the same as a calendar day, and the practical result depends on port custom, working hours, and the precise charterparty expression.

Weather Working Day is more specific. Under this expression, weather that prevents or would have prevented cargo operations may be excluded from laytime. If the bad weather affects only part of the day, the exclusion is normally calculated proportionally. Rain, strong wind, swell, ice, fog, or other conditions may be relevant where they actually affect loading or discharging. However, the weather must be connected with cargo operations, not merely with general inconvenience at the port.

When laytime is based on a daily loading or discharging rate, the allowed laytime is found by dividing the cargo quantity by the agreed daily rate. For example, if 50,000 metric tons are to be loaded at 10,000 metric tons per weather working day, the allowed loading laytime is five weather working days. If the result produces a fraction, that fraction is normally counted as the corresponding part of a day, unless the charterparty provides a different result.

Some charterparties refine the calculation further by using expressions such as per hatch, per working hatch, or per workable hatch. In these cases, the number of available or workable hatches affects the permitted loading or discharging time. A hatch is not necessarily workable throughout the entire operation. Once the hold below a hatch has been completed, that hatch may no longer be relevant for calculating the average working capacity.

Important Factors to Include in Laytime Calculation

Accurate laytime calculation depends on identifying the contractual time allowance and then applying the facts in the correct order. The main factors include the validity and timing of the Notice of Readiness, the commencement of laytime, the allowed laytime, cargo operation records, interruptions, exceptions, demurrage rate, despatch rate, and whether laytime is reversible or non-reversible.

  1. Notice of Readiness (NOR): The Notice of Readiness is the formal notice by which the master or the ship’s agent informs the charterer that the ship has arrived at the contractual place and is ready to load or discharge.
  2. Laytime Commencement: Laytime begins when the charterparty conditions for commencement are satisfied. This may be immediately after valid NOR, after six hours, at the next working period, or at another agreed time.
  3. Allowed Laytime: The allowed time may be fixed in hours or days, or calculated from the cargo quantity and the agreed cargo handling rate.
  4. Demurrage and Despatch Rates: Demurrage is payable when allowed laytime is exceeded. Despatch is payable when cargo operations finish before laytime is exhausted, if the charterparty provides for it.
  5. Exceptions and Interruptions: Weather, holidays, strikes, equipment breakdowns, shifting, waiting for berth, or port restrictions may affect the time count, depending on the charterparty wording.
  6. Time Used for Loading and Discharging: The actual time used must be calculated from the commencement of laytime until completion of loading or discharging, less any periods that are contractually excluded.
  7. Final Settlement: The difference between time allowed and time used determines whether demurrage or despatch is payable.

Categories of Laytime

Laytime may be structured in several different ways. The selected structure changes the commercial balance between the shipowner and the charterer.

  1. Reversible Laytime: Loading and discharging laytime are combined. Unused time at one port may be applied to the other port. This gives the charterer flexibility and can reduce demurrage exposure.
  2. Non-Reversible Laytime: Loading and discharging laytime are separate. Time saved at the loading port cannot be used at the discharging port, and time saved at the discharging port cannot be used at the loading port.
  3. Average Laytime: Time used at loading and discharging is averaged or balanced according to the charterparty wording. This is commercially similar to reversible laytime but must be applied according to the exact clause.
  4. Straight Laytime: Each operation has its own allowance, with no reversibility or averaging unless expressly agreed.
  5. Weather Working Days (WWD): Laytime counts only when the weather permits cargo operations, subject to the wording and local facts.
  6. Working Days: Laytime counts during the agreed working days and may exclude Sundays, holidays, Fridays, Saturdays, or other periods depending on the port and charterparty.

Method of Calculating Laytime

A professional laytime calculation should follow a clear sequence. First, identify the governing charterparty wording. Second, review the statement of facts. Third, determine whether NOR was validly tendered. Fourth, calculate when laytime commenced. Fifth, count all periods that count as laytime. Sixth, deduct any exceptions or interruptions that the charterparty allows. Finally, compare the counted time with the allowed laytime and apply the demurrage or despatch rate.

  1. Review the Charterparty: Check the laytime clause, NOR clause, exceptions, demurrage, despatch, reversibility, working day wording, and any special port clauses.
  2. Check the Statement of Facts: Confirm the arrival time, NOR time, berthing time, cargo operation periods, stoppages, weather delays, and completion time.
  3. Confirm Laytime Start: Apply the agreed notice time and any restrictions on commencement.
  4. Count Actual Time Used: Count time from commencement to completion, then deduct any excluded periods.
  5. Compare With Allowed Laytime: Determine whether time has been saved or exceeded.
  6. Calculate Demurrage or Despatch: Convert excess or saved time into money using the agreed daily rate on a pro-rata basis.
  7. Prepare the Laytime Statement: Show the calculation clearly so both parties can review and settle the claim.

Exceptions to Laytime

Laytime exceptions are not automatic. They apply only if the charterparty wording permits them. Common exceptions include bad weather, holidays, strikes, force majeure events, port authority restrictions, breakdowns of shore equipment, shifting between berths, and waiting for berth. The person preparing the laytime statement must carefully distinguish between time that is operationally lost and time that is contractually excluded.

For example, rain may stop loading grain and therefore interrupt a weather working day. However, the same rain may not affect the discharge of coal under covered equipment. A public holiday may be excluded under SHEX wording, but may still count if cargo work is actually performed and the charterparty says “unless used.” These small expressions can significantly alter the final demurrage or despatch result.

Commencement of Laytime

The commencement of laytime is often the most disputed part of a calculation. A valid Notice of Readiness must normally be tendered when the ship has reached the contractual destination and is ready in all material respects to load or discharge. The ship must be physically and legally ready, with cargo spaces ready, relevant documentation available, and port or health formalities satisfied where required by the charterparty.

Some charterparties allow NOR to be tendered at a berth. Others allow NOR at anchorage, roads, or customary waiting place. Some forms include berth or no berth wording, which may allow laytime to start even if the ship is waiting for a berth. The exact wording is crucial because an invalid NOR may prevent laytime from starting until a fresh valid notice is given or until cargo operations actually begin.

Laytime Calculation in a Voyage Charterparty Agreement

In a voyage charterparty, laytime is connected with freight. The shipowner earns freight for carrying the cargo, while the charterer receives an agreed amount of time to perform loading and discharging. If the charterer uses more time than agreed, demurrage compensates the shipowner for the additional detention of the ship. If less time is used and despatch is agreed, the shipowner rewards the charterer for faster cargo operations.

The core calculation is simple in principle:

  • Allowed Laytime minus Actual Counted Time Used equals Time Saved or Time Exceeded.
  • Time Saved multiplied by the despatch rate equals Despatch.
  • Time Exceeded multiplied by the demurrage rate equals Demurrage.

However, the practical calculation can become complex when the charterparty includes weather exceptions, holidays, turn time, shifting, NOR disputes, reversible laytime, multiple ports, or “unless used” wording.

Laytime Calculation Example 1

Charterparty Terms:

  • Allowed laytime for loading: 48 hours
  • Allowed laytime for discharging: 72 hours
  • Demurrage rate: $10,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship arrives and tenders NOR at the loading port on April 1 at 10:00.
  • Laytime starts after 6 hours of notice time on April 1 at 16:00.
  • Loading is completed on April 3 at 18:00.
  • Ship tenders NOR at the discharging port on April 10 at 08:00.
  • Laytime starts immediately.
  • Discharging is completed on April 12 at 12:00.

Loading Calculation:

  1. Actual loading time from April 1 at 16:00 to April 3 at 18:00 equals 50 hours.
  2. Allowed loading laytime is 48 hours.
  3. Excess time is 2 hours.
  4. 2 hours equals 1/12 of a day.
  5. Demurrage for loading is 1/12 × $10,000 = $833.33.

Discharging Calculation:

  1. Actual discharging time from April 10 at 08:00 to April 12 at 12:00 equals 52 hours.
  2. Allowed discharging laytime is 72 hours.
  3. Time saved is 20 hours.
  4. 20 hours equals 5/6 of a day.
  5. Despatch rate is $5,000 per day.
  6. Despatch for discharging is 5/6 × $5,000 = $4,166.67.

Final Settlement:

Demurrage of $833.33 minus despatch of $4,166.67 produces a net despatch balance of $3,333.34. The shipowner owes the charterer $3,333.34.

Laytime Calculation Example 2

Charterparty Terms:

  • Allowed laytime for loading: 36 hours
  • Allowed laytime for discharging: 60 hours
  • Demurrage rate: $12,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship tenders NOR at the loading port on May 5 at 14:00.
  • Laytime starts after 4 hours of notice time on May 5 at 18:00.
  • Loading is completed on May 7 at 20:00.
  • Ship tenders NOR at the discharging port on May 14 at 09:00.
  • Laytime starts immediately.
  • Discharging is completed on May 16 at 15:00.

Loading Calculation:

  1. Actual loading time from May 5 at 18:00 to May 7 at 20:00 equals 50 hours.
  2. Allowed loading laytime is 36 hours.
  3. Excess time is 14 hours.
  4. 14 hours equals 7/12 of a day.
  5. Demurrage for loading is 7/12 × $12,000 = $7,000.

Discharging Calculation:

  1. Actual discharging time from May 14 at 09:00 to May 16 at 15:00 equals 54 hours.
  2. Allowed discharging laytime is 60 hours.
  3. Time saved is 6 hours.
  4. 6 hours equals 1/4 of a day.
  5. Despatch rate is $6,000 per day.
  6. Despatch for discharging is 1/4 × $6,000 = $1,500.

Final Settlement:

Demurrage of $7,000 minus despatch of $1,500 leaves net demurrage of $5,500. The charterer owes the shipowner $5,500.

Laytime Calculation Example 3

Charterparty Terms:

  • Allowed laytime for loading: 24 hours
  • Allowed laytime for discharging: 48 hours
  • Demurrage rate: $8,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship tenders NOR at the loading port on June 1 at 06:00.
  • Laytime starts after 2 hours of notice time on June 1 at 08:00.
  • Loading is completed on June 2 at 04:00.
  • Ship tenders NOR at the discharging port on June 8 at 15:00.
  • Laytime starts immediately.
  • Discharging is completed on June 10 at 12:00.

Loading Calculation:

  1. Actual loading time from June 1 at 08:00 to June 2 at 04:00 equals 20 hours.
  2. Allowed loading laytime is 24 hours.
  3. Time saved is 4 hours.
  4. 4 hours equals 1/6 of a day.
  5. Despatch rate is $4,000 per day.
  6. Despatch for loading is 1/6 × $4,000 = $666.67.

Discharging Calculation:

  1. Actual discharging time from June 8 at 15:00 to June 10 at 12:00 equals 45 hours.
  2. Allowed discharging laytime is 48 hours.
  3. Time saved is 3 hours.
  4. 3 hours equals 1/8 of a day.
  5. Despatch rate is $4,000 per day.
  6. Despatch for discharging is 1/8 × $4,000 = $500.

Final Settlement:

Total despatch is $666.67 + $500 = $1,166.67. The shipowner owes the charterer $1,166.67.

Laytime Calculation Example 4

Charterparty Terms:

  • Allowed laytime for loading: 30 hours
  • Allowed laytime for discharging: 50 hours
  • Demurrage rate: $9,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship tenders NOR at the loading port on July 10 at 05:00.
  • Laytime starts immediately.
  • Loading is completed on July 11 at 12:00.
  • Ship tenders NOR at the discharging port on July 18 at 22:00.
  • Laytime starts after 3 hours of notice time on July 19 at 01:00.
  • Discharging is completed on July 21 at 00:00.

Loading Calculation:

  1. Actual loading time from July 10 at 05:00 to July 11 at 12:00 equals 31 hours.
  2. Allowed loading laytime is 30 hours.
  3. Excess time is 1 hour.
  4. 1 hour equals 1/24 of a day.
  5. Demurrage for loading is 1/24 × $9,000 = $375.

Discharging Calculation:

  1. Actual discharging time from July 19 at 01:00 to July 21 at 00:00 equals 47 hours.
  2. Allowed discharging laytime is 50 hours.
  3. Time saved is 3 hours.
  4. 3 hours equals 1/8 of a day.
  5. Despatch rate is $4,500 per day.
  6. Despatch for discharging is 1/8 × $4,500 = $562.50.

Final Settlement:

Demurrage of $375 minus despatch of $562.50 results in net despatch of $187.50. The shipowner owes the charterer $187.50.

Laytime Calculation Example 5

Charterparty Terms:

  • Allowed laytime for loading: 42 hours
  • Allowed laytime for discharging: 54 hours
  • Demurrage rate: $11,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship tenders NOR at the loading port on August 3 at 14:00.
  • Laytime starts after 6 hours of notice time on August 3 at 20:00.
  • Loading is completed on August 5 at 10:00.
  • Ship tenders NOR at the discharging port on August 12 at 18:00.
  • Laytime starts after 4 hours of notice time on August 12 at 22:00.
  • Discharging is completed on August 15 at 08:00.

Loading Calculation:

  1. Actual loading time from August 3 at 20:00 to August 5 at 10:00 equals 38 hours.
  2. Allowed loading laytime is 42 hours.
  3. Time saved is 4 hours.
  4. 4 hours equals 1/6 of a day.
  5. Despatch rate is $5,500 per day.
  6. Despatch for loading is 1/6 × $5,500 = $916.67.

Discharging Calculation:

  1. Actual discharging time from August 12 at 22:00 to August 15 at 08:00 equals 58 hours.
  2. Allowed discharging laytime is 54 hours.
  3. Excess time is 4 hours.
  4. 4 hours equals 1/6 of a day.
  5. Demurrage for discharging is 1/6 × $11,000 = $1,833.33.

Final Settlement:

Demurrage of $1,833.33 minus despatch of $916.67 leaves net demurrage of $916.66. The charterer owes the shipowner $916.66.

Laytime Calculation Example 6

Charterparty Terms:

  • Allowed laytime for loading: 60 hours
  • Allowed laytime for discharging: 72 hours
  • Demurrage rate: $10,000 per day or pro-rata
  • Despatch rate: 50% of demurrage rate

Timeline:

  • Ship tenders NOR at the loading port on September 4 at 16:00.
  • Laytime starts after 4 hours of notice time on September 4 at 20:00.
  • Loading is completed on September 7 at 00:00.
  • Ship tenders NOR at the discharging port on September 14 at 07:00.
  • Laytime starts immediately.
  • Discharging is completed on September 16 at 20:00.

Loading Calculation:

  1. Actual loading time from September 4 at 20:00 to September 7 at 00:00 equals 52 hours.
  2. Allowed loading laytime is 60 hours.
  3. Time saved is 8 hours.
  4. 8 hours equals 1/3 of a day.
  5. Despatch rate is $5,000 per day.
  6. Despatch for loading is 1/3 × $5,000 = $1,666.67.

Discharging Calculation:

  1. Actual discharging time from September 14 at 07:00 to September 16 at 20:00 equals 61 hours.
  2. Allowed discharging laytime is 72 hours.
  3. Time saved is 11 hours.
  4. 11 hours equals 11/24 of a day.
  5. Despatch rate is $5,000 per day.
  6. Despatch for discharging is 11/24 × $5,000 = $2,291.67.

Final Settlement:

Total despatch is $1,666.67 + $2,291.67 = $3,958.34. The shipowner owes the charterer $3,958.34.

Timesheets and Laytime Calculation

Timesheets are essential evidence for laytime calculation. They record the chronological history of the ship’s stay in port and provide the foundation for any demurrage or despatch claim. A well-prepared timesheet should show arrival, anchoring, berthing, NOR tendering, commencement of laytime, start and stop of cargo operations, interruptions, shifting, completion, document handling, and departure.

The value of a timesheet depends on accuracy. Times must be recorded consistently, usually in local time unless otherwise stated. Any interruption should be described clearly. For example, “rain stopped loading” is more useful than a vague reference to “delay.” If cargo operations stop because of weather, shore crane failure, strike, hatch cover movement, draft survey, fumigation, customs inspection, or port authority order, the timesheet should identify the cause and the exact duration.

Where a dispute arises, the timesheet and statement of facts are often the first documents reviewed by the shipowner, charterer, broker, claims handler, or arbitrator. Clear records reduce argument and make the final settlement faster.

BIMCO Standard Time Sheet

The Baltic and International Maritime Council (BIMCO) has developed widely used maritime forms and clauses, including resources connected with laytime and cargo operation records. A standard timesheet helps parties record events in a consistent format and reduces uncertainty during calculation.

A practical timesheet normally includes the ship name, port name, charterparty date, cargo, arrival time, NOR tendering time, berthing time, commencement of laytime, cargo operation periods, stoppages, completion time, sailing time, total time counted, time excepted, demurrage, despatch, and signatures. Where possible, the timesheet should be signed or acknowledged by the master, agent, terminal, and charterer’s representative.

To review BIMCO resources, please check https://www.bimco.org/

What is the Difference Between Laycan and Laytime?

Laycan means laydays and cancelling. It is the agreed date range during which the ship is expected to present for loading. The first date is the earliest expected readiness date, and the cancelling date is the final date by which the ship must be ready, unless the charterer agrees to continue with the fixture.

Laytime is different. Laytime is the time allowed for loading or discharging once the ship has arrived, tendered a valid NOR, and satisfied the commencement conditions under the charterparty. Laycan deals with the ship’s arrival window. Laytime deals with the time allowed for cargo operations.

If the ship arrives before laycan, the charterer is normally not obliged to start cargo operations before the agreed window, unless the charterparty allows early NOR or the charterer voluntarily accepts the ship early. If the ship arrives after the cancelling date, the charterer may have a right to cancel, depending on the terms of the charterparty.

Laytime Calculation Software

Laytime calculations are still frequently prepared in spreadsheets, especially in small and medium-sized chartering operations. However, dedicated maritime software is increasingly used by shipowners, charterers, operators, and brokers because it improves consistency, stores statements of facts, applies standard templates, and helps manage demurrage and despatch claims.

Well-known providers and industry resources include:

  1. Veson Nautical – voyage management and chartering software with laytime functionality. Website: https://www.veson.com/
  2. BIMCO – maritime association providing standard forms, clauses, and industry resources. Website: https://www.bimco.org/
  3. Danaos Corporation – maritime software solutions including chartering and operational modules. Website: https://www.danaos.gr/
  4. SDSD – maritime technology and operational software solutions. Website: https://www.sdsd.com/
  5. Chinsay – contract and freight process software for shipping and commodity markets. Website: https://www.chinsay.com/
  6. Burmester & Vogel – laytime and demurrage claims management software. Website: https://www.burmester-vogel.com/
  7. Netpas – maritime software including voyage and laytime calculation tools. Website: https://netpas.net/

Laytime Calculation Process

The laytime calculation process can be summarized in a practical sequence. First, the ship arrives at the contractual place. Second, the master or agent tenders Notice of Readiness. Third, the agreed notice time expires. Fourth, laytime begins. Fifth, cargo operations and any interruptions are recorded in the statement of facts. Sixth, time is counted or excluded according to the charterparty. Seventh, the final laytime statement is prepared and exchanged for settlement.

Although the arithmetic may appear simple, the legal and commercial result depends on the exact wording of the charterparty. Expressions such as “weather working day,” “SHEX unless used,” “whether in berth or not,” “reachable on arrival,” “time lost waiting for berth to count,” and “once on demurrage always on demurrage” can all change the outcome. Therefore, every laytime calculation should be prepared from the charterparty first, not from a generic formula.

For shipowners, accurate laytime calculation protects the earning time of the ship. For charterers, it prevents overpayment and helps control voyage costs. For brokers and operators, it provides a transparent basis for final freight, demurrage, and despatch settlement.