Laytime Calculations

Introduction to Laytime

Laytime is the time period agreed upon by the Shipowner and the Charterer during the Voyage Charter, where the Charterer commits to loading and unloading the ship without additional payment beyond the Freight. In the realm of shipping, time equates to money, thus the Charterer’s time to manage these tasks is finite.

Laytime is crucial, embodying free expression, negotiations, and agreements between Shipowners and Charterers, legal applications, trade practices, and often, disputes within Voyage Chartering. The interpretation, application, and impact of Laytime can vary broadly in commercial settings. This review relies on the most recent authoritative Laytime Rules in the industry, specifically the Laytime Definitions endorsed by BIMCO, FONASBA, CMI, and the Baltic Exchange.

Disagreements related to Laytime calculations are frequent in Voyage Charter Parties. It’s evident that clearer wording in Laytime Clauses could prevent some issues. Regrettably, the Printed Clauses in Standard Charter Party Forms are occasionally vague, necessitating amendments to clarify Laytime Calculation Methods in Standard Voyage Charter Party Forms.

It is advisable to incorporate any interpretation rules from Maritime Organisations that have been released over the years into the Charter Party. This includes Voyage Charter Party Laytime Interpretation Rules 1993, commonly referred to as VOYLAYRULES 1993, and Laytime Definitions for Charter Parties 2013, shortly known as “Laytime Definitions 2013”.

The objectives of Laytime Calculation are:

To determine the time the Shipowner allows the Voyage Charterer for loading and/or unloading the cargo.
To compute the so-called Demurrage or Despatch, which is a compensation agreed upon that is paid to the Shipowner if there is a delay in cargo operations (i.e., Demurrage is paid when actual loading/unloading time exceeds Laytime), or alternatively, compensation to the Voyage Charterer if there is a time saving in cargo operations (i.e., Despatch Money (DM) is paid when actual loading/unloading time is less than Laytime).
To furnish proof in disputes that lead to arbitration or court decisions.

Time Risk During Sea Voyage

In Voyage Chartering, the time risk during the Sea Voyage is typically borne by the Shipowners. Occasionally, specific clauses in the Charter Party may alter this rule. An instance is observed in EXXONMOBILVOY 2012 (part II, clause 21(a) “ice during voyage”), where it’s specified that the Voyage Charterer might need to reimburse Shipowners for additional steaming and bunker (fuel) costs incurred due to ice during the sea voyage, which hinders the ship’s ability to reach the designated Port. Ice Clauses primarily address ice-related issues near the Loading and Discharging Ports.

Ships’ ETA (Estimated Time of Arrival) Notices

Failure to issue ETA (Estimated Time of Arrival) Notices as stipulated can render the Shipowner liable for any economic damages suffered by the Voyage Charterer due to delayed or absent ETA Notices. In certain agreements, compensation to the Voyage Charterers may be granted in the form of additional time for loading and/or discharging (Laytime).

Ships’ Arrival at the Agreed Destination

Since Shipowners carry the risk of delay during the sea voyage, and the risk is shared with Charterers when the ship is at a Port, it is crucial to pinpoint when the sea voyage concludes and the ship’s Port stay commences under applicable rules.

A ship must arrive at the Agreed Destination to be deemed an Arrived Ship. Thus, the more precisely the destination is outlined in the Charter Party, the clearer it is when the ship has arrived. Voyage Charters fall into three (3) categories based on whether the loading or discharging point is specified as a Berth, a Dock, or a Port. Consequently, Charter Parties are classified as:

Berth Charter Party
Dock Charter Party
Port Charter Party

According to Laytime Definitions 2013 (term 1), “Port shall mean any area where ships load or discharge cargo and includes, but is not limited to, Berths, wharves, anchorages, buoys, and offshore facilities as well as places outside the legal, fiscal, or administrative area where ships wait their turn, regardless of the distance from that area.”

Also, as per Laytime Definitions 2013 (term 2), “Berth shall mean the specific place where the ship is to load or discharge and includes, but is not limited to, any wharf, anchorage, offshore facility, or other location used for handling cargo.”

The 2013 official commentary, when compared to VOYLAYRULES 1993, updated the term “Port” to reflect a broader concept of the Port area as elaborated in The “Johanna Oldendorff” [1971] 2 Lloyd’s Rep. 96; [1972] 2 Lloyd’s Rep. 292; [1973] 2 Lloyd’s Rep. 285, extending it to “places outside the legal, fiscal, or administrative area” of the Port. The term “offshore facilities” was also introduced. Additionally, the definition of “Berth” expanded from the restrictive “Place Within a Port” (as per VOYLAYRULES 1993) to include a broader range of cargo-handling locations.

The Charterer must nominate a Safe Port (SP) where, as per the Charter Party agreement, the ship can safely Reach, Enter, Remain at, and Depart from, without being exposed to unavoidable dangers by good navigation and seamanship.

An extraordinary or unforeseen event may absolve the Charterer of liability regarding the ship’s safety at a Safe Port (SP), should harm occur due to such an event. Nonetheless, the Charterer is obliged to promptly order the ship to another Safe Port (SP).

Safe Anchorage (SA) or Safe Berth (SB) is defined as an Anchorage or a Berth, respectively, where the ship can safely reach, stay, and leave without facing dangers that cannot be avoided through proficient navigation and seamanship. The definition of Safety here is akin to that used for a Safe Port.

Regarding Berth Charter Party and Dock Charter Party, the situation is quite clear: the ship qualifies as an Arrived Ship upon entering the designated Berth or Dock. In these instances, the Shipowner is responsible for any delay in reaching the designated Berth or Dock. Notably, Berth Charter Parties are uncommon in Tanker Trades.

For a Port Charter Party, determining when a ship becomes an Arrived Ship is more complex due to the vast area and varying definitions of a Port, whether from a geographical, administrative, or commercial perspective. Based on Common Law (The “Johanna Oldendorff” [1971] 2 Lloyd’s Rep. 96; [1972] 2 Lloyd’s Rep. 292; [1973] 2 Lloyd’s Rep. 285), the criteria for an “Arrived Ship” in Port Charter Parties are:

• Ship must be within the geographical and legal confines of the Port as commonly recognized by its users.
• Ship must be readily and effectively available to the Charterer, able to move to a Berth promptly upon notification of availability.
• Ship must be moored at a customary location for vessels of similar size and type while awaiting a Berth at that Port.

It is essential for all Charter Parties to specify the exact moment when the risk and costs associated with time delays transfer from Shipowner to Charterer.

Always Accessible (AA) signifies that the Charterer guarantees the provision of an available loading or discharging Berth upon the ship’s arrival at the Port, which the ship can reach Safely Without Delay. Furthermore, the Charterer ensures that the ship can safely and promptly leave the Berth at any stage before, during, or after loading or discharging.

Waiting for Berth Clause

A prudent measure for Shipowners is to include a specific Waiting for Berth Clause or to incorporate the phrase Whether In Berth/Port Or Not (WIBPON) in the Laytime Clause. This clarification ensures that Laytime may commence when the ship is stationed at the usual or specified waiting area, even if it has not yet arrived at the destination outlined in the Charter Party. The issue of whether a Berth is accessible upon the ship’s arrival has been extensively debated, especially in the context of Voyage Tanker Charters over the years. Regrettably, due to conflicting legal precedents, this area often remains ambiguous.

Reachable on Arrival or Always Accessible (AA)

“Reachable on arrival shall mean that the Charterer ensures an available loading or discharging Berth is ready for the ship upon its arrival at the Port, which the ship can safely and promptly access.” (Laytime Definitions).

The concept of Reachable on Arrival has led to significant legal disputes over time. The updated Laytime Definitions 2013 reflect the current legal stance that any delay caused by Bad Weather or Congestion constitutes a violation of the Charterers’ duties.

The contentious phrase “in the absence of an abnormal occurrence,” originally in VOYLAYRULES 1993, was removed. Furthermore, the term Always Accessible (AA) is generally understood to be equivalent to Reachable On Arrival (ROA) regarding entry into a Berth, although its application upon departure was more ambiguous. Consequently, the terms have been distinctly defined, with additional stipulations regarding the departure process, ensuring Charterers facilitate a safe and unimpeded departure for the ship.

Numerous Charter Parties mandate the Charterer to appoint a Reachable Berth upon the ship’s arrival at the destination. This stipulation shifts the delay risk to the Charterer if they fail to appoint an unoccupied Berth due to Port congestion (The “Angelos Lusis” [1964] 2 Lloyd’s Rep. 28). This clause’s application extends beyond physical barriers, encompassing scenarios where a Berth is unoccupied but inaccessible due to adverse Weather Conditions or Fog.

The ship does not have to be an Arrived Ship; it only needs to have arrived at a point, within or outside the Port, typically used as a waiting area in the absence of a Berth Nomination. From this point, the Charterer assumes the risk of any delay, liable for damages due to failing to appoint a Reachable Berth.

However, if the ship is deemed an Arrived Ship at this juncture, initiating Laytime, the Charterer is not responsible for double compensation for the same Time Lost. Once Laytime starts, any Time Saved during loading may offset the initial delay incurred while a Reachable Berth was unavailable. Conversely, if the ship isn’t considered an Arrived Ship at that point, the periods of waiting and loading are treated separately, meaning saved time during loading doesn’t compensate for the delay in Berth nomination (The “Delian Spirit” [1971] 1 Lloyd’s Rep. 64; [1971] 1 Lloyd’s Rep. 506).

Clauses Tailored for Specific Ports

In frequently Congested Ports, where the Normal Waiting Place lies outside Port boundaries, standard clauses typically state that Laytime begins when the ship reaches a designated point but cannot advance due to Berth shortages or other hindrances. This provision remains valid even if the ship has not achieved Arrived Ship status at that location.

Ships’ Readiness

Principal Rule

The overarching principle is that “before a ship can be deemed ready to load and discharge, it must fulfill customs, quarantine, and other requirements set by the local authorities (Administrative Readiness).” Readiness encompasses Physical Readiness, Legal Readiness, and Administrative Readiness. Physical Readiness requires the ship to be clean and prepared to receive or release the cargo (Cargoworthy Ship). Legal Readiness and Administrative Readiness ensure that the ship has completed all necessary formalities (customs clearance, documentation, etc.) and aligns with the commercial agreements for the start of loading or discharging.

General Exceptions from the Principal Rule

A ship does not need to be fully Legally and Physically ready to issue a Valid Notice of Readiness (NOR). Depending on the circumstances, the Charterers must acknowledge that the ship can be considered ready even if some onboard preparations are incomplete (such as uncovering hatches) or some formalities are pending (like customs clearance and Free Pratique as required by health authorities). Such exceptions are particularly justified in Ports where physical or formal measures cannot commence until the ship is docked due to local regulations or routines.

Agreed Exceptions from the Principal Rule

It is common for the Charter Party to include clauses that waive the requirements of the principal rule. For instance, VOYLAYRULES 1993 modifies the principal rule regarding Readiness by stating that the near completion of the ship’s formalities, Free Pratique, and Custom Clearance, should not prevent the tendering of Notice of Readiness (NOR). However, any time lost due to delays in completing these formalities should not count towards Laytime or time on Demurrage.

According to Laytime Definitions 2013, Free Pratique now solely pertains to compliance with Port Health requirements, indicating that these definitions do not directly affect the concept of Ship’s Readiness. The new definitions avoid elaborating on Free Pratique and Custom Formalities, acknowledging the significant variations across different states. These clauses and definitions typically come into play when a Berth is unavailable in a Berth Charter. When a Berth is available, Notice of Readiness (NOR) is usually issued once the ship is at the Berth.

If no Berth is available, the ship may issue NOR Whether In Free Pratique Or Not (WIFPON) and/or Whether Customs Cleared Or Not (WCCON), rendering such formalities irrelevant to the tendering of a Valid Notice of Readiness (NOR) while a Berth is unavailable. Generally, with a WIFPON or WCCON qualification, formalities do not impact the ship’s Readiness or the start of Laytime, which will commence as per the Charter Party, even though – and as long as – a Berth remains unavailable. In Tanker Voyage Charters, if tanks require inspection for cleanliness by or on behalf of Charterers, it is essential to have provisions for the consequences of the time lost (Shellvoy 6, part II, clause 2 “cleanliness of tanks”).

Notice of Ships’ Arrival and Readiness

Upon arrival and readiness to load or discharge, the Ship Master typically issues a Notice of Readiness (NOR) declaring the ship ready to load. Often, Charterers are entitled to a Notice Time (Free Time, Grace Time) before Laytime commences.

Written Notice of Readiness (NOR)

Unless Expressly Agreed otherwise, the notice can be delivered orally or in writing. To prevent misunderstandings and disputes over the validity of a Notice of Readiness (NOR), oral notices should be avoided. VOYLAYRULES 1993, term 20, which is widely accepted, specifies that “in writing shall mean any visibly expressed form of reproducing words; the medium of transmission shall include electronic communications such as radio communications and telecommunications,” although it is not reiterated in Laytime Definitions 2013.

Time of Notice of Readiness (NOR) Provision

Notice of Readiness (NOR) must be issued as soon as the ship is ready to start loading or discharging. This means that if the ship is instructed to wait outside the Berth or Port in a Berth Charter Party or Port Charter Party respectively, the Notice of Readiness (NOR) should be issued. If the Charter Party stipulates that Notice of Readiness (NOR) must be given within office hours, any Notice of Readiness (NOR) issued after office hours will not be effective until the next office hours begin. Office hours are typically standard business hours at the relevant Port, and Charterers cannot delay the start of Laytime by closing their offices early.

Notice of Readiness (NOR) and Statements of Facts (SOF) are critical documents indicating both the delivery and acceptance of the notice. It is important to note that if the Notice of Readiness (NOR) is accurate, Charterers cannot delay the commencement of Notice Time and Laytime by refusing to accept the Notice of Readiness (NOR).

Sea Notices or Premature Notices

It occasionally happens that a Notice of Readiness (NOR) is issued before the ship actually reaches the agreed destination, such as when the Pilot is on Board. These early notices, known as Sea Notices or Premature Notices, are generally not effective until the ship is truly Arrived and Ready, unless otherwise stipulated.

As such, these Sea Notices are typically seen as Invalid, and the Ship Master must issue a Fresh Notice of Readiness (NOR) once the ship is actually Arrived and Ready. If the Ship Master contends that the earlier Sea Notice was Valid, the New Notice of Readiness (NOR) should be noted as “Without Prejudice to the Notice of Readiness (NOR) given at (insert earlier time and day of first NOR).”

The Validity of the Notice of Readiness (NOR) hinges on the ship’s arrival at the contractual destination and its Physical and Legal readiness to start cargo operations. An issued document that doesn’t meet these conditions is considered a Nullity.

An Invalid Notice of Readiness (NOR) may prevent the start of Laytime, and if cargo operations proceed, this could benefit the Charterer. Validity is determined by the Charter Party Clauses and the definition of an Arrived Ship. Another crucial aspect of Validity involves the ship’s Readiness to load or discharge, often termed as being Ready In All Respects. This implies that the ship must be Physically Ready and Legally Permitted to handle cargo. If not, the given Notice of Readiness (NOR) may be deemed Premature and subject to Rejection. Delays due to the ship not being arrived and ready or from issuing an Invalid Notice of Readiness (NOR) fall under the Shipowner’s Risk.

The Correctness of a Notice of Readiness (NOR) depends on “How,” “Where,” and “When” it is issued and accepted. An Incorrect Notice of Readiness (NOR) might not conform to prescribed methods and thus may be ineffective.

Notice of Readiness (NOR) should be issued during specified Office Hours, and if the original is Invalid, a Fresh Notice of Readiness (NOR) might need to be issued periodically by the Ship Master. Office Hours typically refer only to business office working hours, not Port or Stevedore hours. However, if the Charter Party allows for Notice of Readiness (NOR) on Saturdays, a Correct Notice of Readiness (NOR) could be issued via email, fax, etc., even outside the recipient’s office hours. If the Charter Party dictates Notice of Readiness (NOR) during Office Hours and it’s given outside these hours, it becomes effective only at the beginning of the next business day.

LAYCAN

The “Laydays and Cancelling” LAYCAN Clause specifies when Notice of Readiness (NOR) can be issued, indicating that Laytime shouldn’t start before a certain day (LAY), and if Notice of Readiness (NOR) isn’t given by another specified day (CAN), the Charterers may cancel the Charter Party. For example, the clause might state “LAYDAYS 1st June/Cancelling date 15th June.” Typically, the Ship Master can issue a Notice of Readiness (NOR) and use up the Notice Time before the LAYDAYS begin, but Laytime won’t start until the earliest agreed time per the LAYCAN Clause.

Notice of Readiness (NOR) in Each Port?

It’s often unclear in Charter Parties whether a Notice of Readiness (NOR) needs to be issued at each Port or just at the First Loading and/or Discharging Port. Under English Common Law, it’s not required at the Discharging Port. However, it’s advisable to Tender Notice of Readiness (NOR) at every Port where Laytime counting is to occur to prevent disputes. This doesn’t mean that Shipowners should provide Charterers with a Notice Time simply because a Notice of Readiness (NOR) was issued, unless this is explicitly agreed in the Charter Party.

Length of Notice of Readiness (NOR)

Many Voyage Charterparties provide Charterers with additional time after a Valid Notice of Readiness (NOR) is issued. Originally, this so-called Notice Time was meant to allow the Charterer, or the Shipper/Receiver, time to prepare for loading or discharging after being notified of the ship’s Arrival and Readiness.

In the modern era, where ships are equipped with fax and email and Shipowners often maintain constant contact with Charterers, this notice time has largely become redundant. Nevertheless, many Standard Voyage Charterparty Forms still grant Charterers this Notice Time. For instance, in the GENCON 1994 Charter Party Form (part II, part of clause 6(c) “Laytime – Commencement of Laytime (loading and discharging)”), the clause states:

“Laytime for loading and discharging shall commence at 13.00 hours if Notice of Readiness is given up to and including 12.00 hours, and at 06.00 hours the next working day if Notice is given during office hours after 12.00 hours. Notice of Readiness at loading Port to be given to the Shippers named in Box 17 or if not named, to the Charterers or their agents named in Box 18. Notice of Readiness at the discharging Port to be given to the Receivers or, if not known, to the Charterers or their agents named in Box 19.”

In a Tanker Voyage Charter Party (SHELLVOY 6, part II, part of clause 13 “Notice of Readiness (NOR) / Running Time”):

“Time at each loading or discharging Port shall commence to run 6 hours after the ship is in all respects ready to load or discharge and written notice thereof has been tendered.”

While Notice Time is somewhat outdated today, there are instances where it remains justified, such as when a ship arrives during a holiday period or at night when immediate commencement of loading or discharging may not be feasible. This can lead to the ship being idle until ordinary Working Hours begin. If Shipowners and Charterers agree that this risk should be borne by the Shipowners, they might include a clause like:

“Laytime to commence at the beginning of the next ordinary working shift after the ship’s arrival.”

Once Notice Time begins, it continues, unless Expressly Agreed otherwise, regardless of exceptions in the Laytime Clause. This means Notice Time can be counted during a Sunday or a Holiday, even though these days might be excluded from Laytime under the Laytime Clause. Typically, the Relevant Clause will address this issue.

Notice Time Before the First LAYDAY

Unless otherwise agreed, Notice of Readiness (NOR) can be given and Notice Time counted before the first agreed LAYDAY.

Laytime Counting During Notice Time

Under English law, if loading or discharging begins before Notice Time expires, Shipowners are not entitled to Count Time unless this is expressly agreed in the Charter Party. A typical clause might state:

“Time actually used before commencement of Laytime shall count.”

This clause specifically refers to Time Actually Used, implying it’s for Cargo Handling. This means that breaks, such as for meals, do not count as Laytime, as long as the Notice Time has not yet expired.

Commencement of Time Counting

Laytime will commence after:

The ship arrives at the agreed destination (Port, Berth, Dock, etc.),
The ship is Physically Ready and Legally Ready to load or discharge cargo,
A Notice of Readiness (NOR) is correctly tendered by the Ship Master or Ship Agent of the Shipowner.

If Notice Time is stipulated in the Charter Party, the general rule is that Laytime starts when Notice Time ends. However, Laytime counting can begin even before Notice Time ends. Over the years, various clauses have been developed to address situations where ships cannot immediately proceed to the Berth or loading/discharge place, often resulting in legal and arbitration decisions.

As per Laytime Definitions 2013, term 26, the typical phrase “time lost waiting for Berth to count as loading or discharging time” or “as Laytime” means that: “if no loading or discharging Berth is available and the ship is unable to Tender Notice of Readiness (NOR) at the waiting place then any time lost to the ship shall count as if Laytime were running, or as time on Demurrage if Laytime has expired.

Such time ceases to count once the Berth becomes available. When the ship reaches a place where she is able to Tender Notice of Readiness (NOR), Laytime or time on Demurrage resumes after such tender and, in respect of Laytime, on expiry of any Notice Time provided in the Charter Party.”

Common Clauses Shifting Risk of Delay

A prevalent clause that shifts the risk of delay is found in the GENCON 1994 provision [part II, part of clause 6(c) “Laytime – commencement of Laytime (loading and discharging)”]. This provision states that time lost waiting for a Berth counts as loading or discharging time. The purpose of this clause is to shift the risk before the ship becomes an arrived ship, i.e., from the time when the ship could have entered a Berth if one had been available.

For a Berth Charter, this covers the period while the ship waits in Port until a Berth is available. For a Port Charter, it applies while the ship waits outside the Port or even within the Port but is not Immediately and Effectively at the disposal of the Charterer. The key issue is whether the primary cause of delay is the unavailability of a Berth.

Originally a Berth Charter Clause, its inclusion in Port Charters has led to some confusion due to potential overlap between waiting time and Laytime provisions. Now, it is understood that if the clause states, “all time lost waiting for a Berth to count as Laytime,” such time is treated as Laytime as if the ship were an “Arrived Ship” (The “Darrah” [1967] 1 Lloyd’s Rep. 285; [1976] 2 Lloyd’s Rep. 359).

Regarding Laytime Calculation when such a term is agreed in the Charter Party, it should be noted:

Laytime starts when the Notice of Readiness (NOR) is presented by the Ship Master to the Charterers’ Agent, despite any hold-up due to no available Berth.
Time lost waiting for an available Berth counts as Laytime, until Laytime expires or a Berth is found, whichever occurs first. If Laytime expires while the ship is still waiting, the ship is “on Demurrage.”
If the ship waits for a Berth and Laytime has not yet expired, all Laytime Exceptions apply as if the ship were actually loading/discharging.
If the ship waits and Laytime expires, putting the ship on Demurrage, no Laytime exceptions apply (Once On Demurrage Always On Demurrage).
Waiting time, whether the ship is on Laytime or on Demurrage, stops counting once a Berth is available.
When a Berth becomes available and the ship reaches a place where it can Tender Fresh Notice of Readiness (NOR) per the Charter Party, Laytime or time on Demurrage resumes after such tender. Regarding Laytime, it resumes after any notice time provided in the Charter Party expires, allowing the Charterers to prepare to load or discharge. For Demurrage, time resumes immediately after the Tender of Notice of Readiness (NOR), regardless of any notice time.
The primary purpose of this clause is to transfer the burden and risk of lost time due to unavailable Berths from the Shipowner to the Charterer.
The effect of this provision remains the same in both Berth Charter and Port Charter. In a “Berth Charter,” the ship doesn’t become an Arrived Ship until it reaches the contractual destination (Berth). Notice of Readiness (NOR) isn’t valid until then. This provision supports the Shipowner during waiting times for the Berth.
Similarly, in a Port Charter, this clause protects the Shipowner when the ship must wait outside Port limits, and the usual waiting places are not met.

Furthermore, Laytime Definitions 2013, term 27, introduces similar wording:

Whether in Berth or Not (WIBON) or “Berth or no Berth” means that if the designated loading or discharging Berth isn’t available upon arrival, the ship, upon reaching any usual waiting place at the Port, is entitled to Tender Notice of Readiness (NOR) from it and Laytime commences per the Charter Party.

The official commentary clarifies that this term addresses delays caused by congestion, not weather-related issues. A significant change from VOYLAYRULES 1993 is that Laytime or Demurrage continues once a Berth becomes available and does not pause until the ship reaches the Berth, shifting the risk back to align with the Charter Party’s stipulations. The WIBON Clause is akin to the Time Lost Clause but is specifically relevant in Berth Charter Parties where the ship arrives and no Berth is available, effectively transitioning the agreement into a Port Charter Party, allowing the ship to become an Arrived Ship and starting the Laytime clock sooner.

Clause Enabling Early Notice of Readiness (NOR)

This clause permits the Shipowner to issue a Valid Notice of Readiness (NOR) to load as soon as the ship docks in Port, assuming other conditions for a Valid Notice of Readiness (NOR) are met. It is specifically relevant when a Berth is not available due to Port Congestion, and does not apply when a Berth is free but inaccessible due to poor weather, tides, etc. Regarding Laytime Calculation, this clause functions similarly to a Time Lost Clause.

Laytime Definitions 2013, term 28, also introduces:

Whether in Port or Not (WIPON) shall mean that “if the designated loading or discharging Berth and the usual waiting place at the Port are unavailable upon arrival, the ship is entitled to Tender Notice of Readiness (NOR) from any recognized waiting place off the Port and Laytime shall commence in accordance with the Charter Party.”

This new term allows the Shipowner to issue Notice of Readiness (NOR) from any recognized waiting area off the Port if the usual waiting place is unreachable.

This has a similar meaning and effect to the WIBON Clause. Under this provision, it is unnecessary for the ship to be within Port Limits for Laytime to begin. The Shipowner can issue a Valid Notice of Readiness (NOR) to load as soon as the ship arrives outside the Port, anchored at a location where similar ships typically wait for a Berth. Like WIBON, it applies only in situations where a Berth is unavailable due to Port Congestion.

Laytime Allowance

Laytime is typically specified in the Charter Party, either by a set number of days or hours, or by a cargo handling rate per day (e.g., “9 days,” “96 hours,” or “loading 15,000 mt per day”), applicable to loading, discharging, or both, the latter known as For All Purposes. Alternately, Laytime may be:

Calculable Laytime, requiring calculations based on Charter Party terms and events noted in the statement of facts to determine the Laytime period.

Indefinite Laytime, with Shipowner agreeing to load or discharge according to Custom of Port (COP) or As Fast As Can (FAC) terms, complicating Laytime calculations.

Common methods to determine Laytime include:

A fixed number of days, e.g., “Ten running days allowed for loading.”

A daily cargo handling rate, e.g., “Loading at a rate of 10,000 mt per day.”

A rate per hatch per day, e.g., “Loading at a rate of 300 mt per hatch per day.”

Based on the ship’s loading capacity, e.g., “Six running days allowed for loading based on the ship’s cubic capacity of 600,000 cubic feet. Time adjusted pro rata for larger or smaller ships.”

Regarding cargo handling rates per hatch, terms like Workable Hatch and Available Hatch mean only hatches actually used count, with total time allowed calculated by dividing the quantity in the largest hatch by the Daily Rate Per Workable or Available Hatch. This method is generally less favorable to Shipowners than when only “Hatch” is used without Available or Workable, where Total Time Allowed is the total quantity aboard divided by the product of the number of Hatches and the Daily Cargo-Handling Rate.

In Tanker Trades, Laytime often counts until hoses are disconnected or necessary transport documents are delivered.

Challenges for Shipowners with As Fast As Can (FAC) Clauses

In Contracts of Affreightment (COA), time allowed may relate to a Fixed Cargo-Handling Capacity for specific ship sizes, with variations for larger or smaller vessels, under terms like Liner Terms with Customary Quick Despatch (CQD) or As Fast As The Ship Can Receive/Deliver (FAC). These clauses disadvantage Shipowners, as proving slow loading or unloading by Charterers to claim Demurrage is challenging.

For Shipowners, linking the As Fast As Can (FAC) clause to the ship’s cargo-handling capacity is crucial. If unconnected, they rarely secure compensation for delays outside Charterers’ control, such as traffic issues ashore.

Some Charter Parties include Force Majeure Clauses, protecting both parties from liability when extraordinary events beyond their control, like natural disasters or strikes, prevent fulfilling contractual obligations.

Another issue for Shipowners is that Charterers with a As Fast As Can (FAC) Clause often do not anticipate Demurrage claims, creating both psychological and judicial challenges for Shipowners to assert and collect deserved Demurrage.

Unless otherwise specified, the calculations for Demurrage (D) and Despatch Money (DM) are conducted separately for loading and discharging. If multiple loading or discharging Ports are involved, a single calculation is made for all loading Ports together and another for all discharging Ports together.

Typically, separate calculations for loading and discharging are overridden by a specific agreement in the Charter Party, such as with phrases like “time allowed for loading and discharging, ten days altogether” or “time allowed, ten days all purposes.”

In Voyage Charter Parties, terms like Reversible or Average may be used, for example, “four days for loading and six for discharging, loading and discharging times to be reversible” or “four days for loading, six for discharging, Charterers having the right to average loading and discharging times.”

With Reversible Laytime, the loading and discharging times are combined into a Total Time. Any unused time from loading becomes the Allowed Time for discharging. If the Total Time is exhausted during loading, the ship immediately enters Demurrage upon arrival at the discharging Port.

It is advisable that a Notice of Readiness (NOR) is issued to avoid disputes, although it is typically not required at the discharging Port. For Average Laytime, loading and discharging calculations are performed separately, and then the times for Demurrage and Despatch are offset against each other to compute the final Demurrage (D) or Despatch Money (DM).

Laytime Definitions 2013 defines Average Laytime or To Average Laytime as separate calculations for loading and discharging, where any time saved in one operation is offset against any excess time used in the other. It occurs when separate calculations for each Port are combined to determine the overall outcome—for instance, time saved at one Port is subtracted from Demurrage time at another.

Reversible Laytime, as defined by Laytime Definitions 2013, allows the Charterer the option to combine the time allowed for loading and discharging. If this option is exercised, it effectively treats the combined time as if a Total Time had been specified for both operations.

In contrast to Average Laytime where separate calculations are made, Reversible Laytime involves a single calculation for both loading and discharging, treating them as one event for the purpose of Laytime Calculation.

From the Total Laytime allowance, the total time for both operations is subtracted, and the resultant Demurrage or Despatch amount is calculated. If there are multiple loading Ports during a Voyage Charter, a Reversible Laytime Calculation may be agreed to apply only to the loading Ports.

The outcome is often the same whether using Reversible Laytime or Average Laytime. However, the rule “Once On Demurrage, Always On Demurrage” can lead to significant financial differences between the two methods.

Typically, these clauses are structured to give Charterers the Option, for example, “Laytime for loading and discharging to be Reversible at Charterers’ option.” In such scenarios, Shipowners are at a disadvantage as Charterers will choose the calculation method—either separate or combined under Reversible Time—that best benefits them.

Definite Laytime

Definite Laytime outlines specific days or hours allocated to the Charterer for either loading, discharging, or both, sometimes referred to as All Purposes Laytime. In Definite Laytime, the duration is precisely defined in terms of days or hours. Various terms are used to define Laytime, with key definitions and abbreviations related to LAYDAYS explained as follows:

Day: Defined as a period of twenty-four (24) Consecutive Hours. Any part of a day is counted Pro Rata (Laytime Definitions 2013, term 8). Officially, a Day is now understood as 24 Consecutive Hours, differing from a Calendar Day and a Conventional Day. This definition is favorable from the Shipowners’ perspective as it includes Sundays and Holidays (SHINC) in the Laytime.
Calendar Day: A period of twenty-four (24) Consecutive Hours from 0000 Hours to 2400 Hours, with any part of a day counted pro rata (Laytime Definitions 2013, term 9). This new term encompasses a full 24-hour day.
Conventional Day: A period of twenty-four (24) Consecutive Hours starting at any specified time, with any part of the day counted pro rata (Laytime Definitions 2013, term 10). This term accommodates 24-hour periods that may start at any time during a Calendar Day.
Working Day (WD): A day when work is normally carried out as per local law or practice (Laytime Definitions 2013, term 11). It is advised that the Charter Party clearly defines which days are considered Working Days and which are Holidays at each Port. Clarification of local laws and practices is essential to prevent misunderstandings. Days excluded from Laytime should be explicitly stated in the Charter Party.
Running Days (RD) or Consecutive Days (CD): Days that follow one immediately after the other, emphasizing the uninterrupted nature of Laytime (Laytime Definitions 2013, term 12).
Running Hours or Consecutive Hours: Hours that follow consecutively, commonly used in Tanker Charter Parties (Laytime Definitions 2013, term 13).
Holiday: A day, apart from normal weekly rest days, when work is not usually performed during Ordinary Working Hours due to local law or practice (Laytime Definitions 2013, term 14).
Weather Working Day (WWD): A Working Day or part thereof during which cargo operations can proceed without weather interruptions. If work is stopped due to weather, the stopped duration proportional to a 24-hour period is added to the end of Laytime (Laytime Definitions 2013, terms 15 and 16).
Weather Working Day of 24 hours: A 24-hour period consisting of one or more Working Days during which cargo operations can proceed uninterrupted by weather. Any stoppage time is excluded from Laytime (Laytime Definitions 2013, term 17).
(Working Day) Weather Permitting: This term is synonymous with Weather Working Day of 24 Consecutive Hours, ensuring consistent interpretation (Laytime Definitions 2013, term 18).

The latest Laytime Definitions 2013 offer four distinct definitions of Weather Working Days (WWD), aligning with decisions in English law and marking a significant update from the singular approach in VOYLAYRULES 1993, which covered three forms of Weather Working terms. This differentiation highlights the evolution and refinement in the understanding of Laytime across different conditions.

For clarity and to grasp the significance of these distinctions, here is the complete wording of respective weather working terms as per VOYLAYRULES 1993:

Weather Working Day (WWD) or Weather Working Day of 24 hours or weather working day of 24 consecutive hours: Defined as a working day of 24 consecutive hours, excluding any time when weather prevents loading or discharging of the ship or would have prevented it, had work been in progress (VOYLAYRULES 1993, term 12). This is a day when work is typically done at a port, and it counts as Laytime unless halted by Bad Weather. For instance, if a ship is waiting for an available Berth and Bad Weather would have stopped loading/discharging, that interruption time does not count as Laytime. This term is less favorable from the Shipowner’s perspective compared to Weather Permitting (WP).
Weather Permitting (WP): Specifies that any time weather interrupts the loading or discharging of the ship, it shall not count as Laytime (VOYLAYRULES 1993, term 13). Here, if a ship awaits an available Berth and Bad Weather would have hindered loading/discharging, this interruption counts as Laytime. This provision is more favorable for Shipowners compared to a “Weather Working Day (WWD).”

Additional terms not included in Laytime Definitions 2013 but significant for understanding include:

Clear Days: Defined as Consecutive Days starting at 0000 hours the day after a Notice of Readiness (NOR) is given and ending at 2400 hours on the last day stipulated (VOYLAYRULES 1993, term 9). Typically used to define “Notice Time,” where the first and last days are excluded. For example, if a Notice of Readiness is given on June 15 for “7 Clear Days,” the countdown starts on June 16 at 0000 and ends on June 22 at 2400, with cargo readiness expected on June 23.
Days All Purposes (DAP): Often synonymous with “Reversible Laytime,” or may be phrased as “time allowed for loading and discharging X days altogether.”

The terms Weather Working (WW) and Weather Permitting (WP) have historically been sources of considerable debate and misunderstanding. Despite efforts, no globally recognized interpretation has emerged, leading to ongoing disputes.

Expressions like “Time allowed for loading 5 days Weather Permitting (WP)” or “Time allowed for loading 5 days Weather Working (WW)” frequently appear in Voyage Charter Parties. It’s advisable for Charterers and Shipowners to discuss these terms in greater detail to formulate clauses that are clear and mutually acceptable, though this is often a complex task. Alternatively, referring to standardized definitions such as those in Laytime Definitions for Charter Parties 2013 and their official commentary, which align with English law, is recommended.

However, even after the publication of these definitions, new discussions and disputes are anticipated. In terms of Weather Exceptions, three primary questions should be considered and agreed upon in every Charter Party:

Should weather stoppages in the Port also halt time counting for ships waiting their turn to load or discharge?
Should weather stoppages outside the Ports’ normal working hours, when ships would not be loading or discharging anyway, affect the time counting?
How should weather stoppages be mathematically handled in the time counting?

Following the latest Laytime Definitions 2013, the official commentary under Laytime Definition No. 18 explains that the term (Working Day) Weather Permitting carries the same meaning and interpretation as Definition No. 16 for Weather Working Day (WWD) of 24 Consecutive Hours. Therefore, for practical purposes, it is sufficient to refer to Laytime Definitions No. 15 and No. 16, as both clearly state that they apply when an “interruption occurs, or would have occurred if work had been in progress.”

Definition 15, for Weather Working Day (WWD), specifies that any interruption to time counting should be calculated “by reference to the ratio which the duration of the interruption bears to the time which would have or could have been worked but for the interruption.”

According to the official commentary, this means deductions for Bad Weather are calculated proportionally, comparing the interruption during the ship’s normal (or assumed, if waiting on turn) working hours to a full 24-hour day. For example, a two-hour stoppage during an eight-hour working day equates to a deduction of six hours (i.e. (2/8) * 24 $= 6$ hours). Thus, if the ship’s normal working period is 8 hours, only 6 hours are excluded, and 18 hours still count as Laytime. Weather delays outside regular working periods are not excluded.

Definition 16, for “Weather Working Day of 24 Consecutive Hours,” states that “the actual duration of an interruption for Bad Weather at any time on a working day, during or outside normal working hours and including periods on turn, is added to the end of Laytime.”

This means that Weather Stoppages, regardless of when they occur within the 24-hour period, are fully deducted from Laytime. So, unlike Definition 15, this provision includes both within and outside normal working hours.

In response to the first question regarding ships waiting their turn to load or discharge: both Definitions 15 and 16 confirm that Weather Stoppages in Port will suspend Laytime counting.

For the second question, regarding stoppages that occur outside a Port’s Ordinary Working Hours when ships are not engaged in cargo operations:

Definition 15 does not exclude such time from Laytime.
Definition 16 does exclude all actual interruption time, regardless of when it occurs.

As to the third question, both definitions use different approaches to calculating Weather Stoppages:

Under Definition 16, the actual duration of the interruption (at any time during the 24-hour day) is deducted directly.
Under Definition 15, a proportional deduction is made, based on the length of the interruption compared to the usual working period, then applied to a 24-hour day.

Once again, it is essential to emphasize that the precise Charter Party wording governs the Laytime Counting process.

Calculable Laytime

In this context, Definite Laytime periods can only be established after performing a calculation, based on clauses in the Charter Party and events listed in the Statement of Facts (SOF). The Laytime duration may result from Tonnage Calculations or Hatch Calculations, as follows:

Tonnage Calculations: If a Charter Party states that a ship is to load or discharge at a certain rate—e.g., a ship loading 100,000 mt at a rate of 20,000 mt/day—then Laytime is five (5) days.
Hatch Calculations: A Charter Party may require loading or discharging at a rate based on tons per hatch and/or per day—e.g., “300 tons per hatch daily.”

Common definitions and abbreviations for Calculable Laytime include:

Per Hatch Per Day (Laytime Definitions 2013, term 6):

Laytime = $Quantity of Cargo / (Daily rate per Hatch \times Number of Hatches) = Days$

Twin parallel hatches count as one, unless a hatch can be worked by two gangs at once, in which case it counts as two hatches.

Per Working Hatch Per Day (WHD) or Per Workable Hatch Per Day (Laytime Definitions 2013, term 7):

Laytime = Largest Quantity in one Hold / (Daily Rate of Loading or Discharging per Working or Workable Hatch × Number of Hatches serving that Hold) $= Days$

The same rules apply regarding hatch counting: twin hatches are counted as one unless they can be worked simultaneously by two gangs.

These methods ensure that Laytime can be accurately calculated when not fixed by a simple number of days or hours.

Indefinite Laytime

In this scenario, Laytime is determined by either the custom of the Port where cargo operations occur, the rate at which the ship can load or discharge, or a combination of both. The Shipowner may consent to having the ship loaded or discharged based on Custom of Port (COP) or on Fast As Can (FAC) conditions. Specifically:

• Customary Despatch (CD) or Customary Quick Despatch (CQD) or Custom of Port (COP): Charterers are expected to clear the ship (i.e., complete loading or discharging) with all reasonable speed in line with the usual practices of the Port. This provides broad leeway, excusing them from delays as long as they operate within the prevailing Port conditions. Typically, this is an imprecise term and tends not to benefit the Shipowners, as there are no defined standards for how quick Customary Despatch (CD) should be. Its usage is best avoided due to the significant ambiguity it introduces. Under this category of Indefinite Laytime language, Shipowners might struggle to establish their right to claim Demurrage (D) or Damages For Detention (DFD) in the event of substantial delay.

• Fast As Can (FAC) or As Fast As the Ship Can Receive/Deliver: This represents another vague expression of non-fixed Laytime. Here, Laytime is assessed based on the maximum rate at which the ship, in fully operational condition, can load or discharge cargo. The actual length of Laytime is uncertain and hinges on subjective evaluation of the ship’s performance. When Fast As Can (FAC) is used, the ship’s physical capacity to load or unload becomes a responsibility of the Shipowner. Conversely, Charterers are required to Despatch the ship (i.e., complete loading or discharging) as promptly as practicable, ideally in accordance with Custom of Port (COP) or Customary Quick Despatch (CQD). Fast As Can (FAC) may also imply that Charterers are responsible for ensuring cargo-handling systems allow the ship to operate at a specified rate. In contrast, a term like Customary Despatch (CD) imposes an obligation solely on the Charterers to move cargo efficiently per the Port’s customs, with no equivalent duty placed on the Shipowner. Ultimately, it is advisable to avoid Fast As Can (FAC) and similar expressions unless they explicitly define how responsibilities are shared between the Negotiating Parties.

Laytime Counting and Exceptions

Once Laytime begins, the Time Allowed to the Charterer for loading or discharging starts running continuously and decreases—this process is known as the “counting of Laytime”—unless the Charter Party includes applicable Exception Clauses, which pause the reduction of the Charterer’s available time. The Shipowners and Charterers in a Voyage Charter Party may agree that certain circumstances will pause Laytime counting. These serve as a safeguard for the Charterer. Examples include Sundays, Holidays, Bad Weather, Strikes, Ballasting, and Shifting of Berth—events that may interrupt the countdown of the Charterer’s Laytime.

Naturally, both Shipowners and Charterers aim to calculate Laytime in a manner that benefits them. For that reason, the wording of Laytime Clauses should be as precise as possible to Express the true intentions of the contracting parties. Laytime is a subject of tough negotiation and frequent disputes between Shipowners and Charterers.

Once the commencement and length of Laytime are determined, the Shipbroker must then account for any Interruptions occurring during that period. The most frequent causes of delay in loading or discharging—therefore, the most common Laytime Exceptions—typically include Sundays, Holidays, or other Non-Working Days or Periods in accordance with Port Customs, Port Congestions, Bad Weather Conditions, Strikes, Political Unrest, or even “any other cause beyond the control of Charterers.” In all these delay scenarios, if the Charter Party does not contain an Express clause stating otherwise, Laytime will not be Interrupted and will continue to run once started—until it ends or until cargo operations are complete.

The following are some of the most frequently used definitions and phrases regarding Laytime exceptions:

• Excepted or Excluded indicates that “the days specified do not count as Laytime even if loading or discharging takes place on those days” (Laytime Definitions 2013, term 19).

• Unless Sooner Commenced means “if Turn-Time (TT) has not yet finished but loading or discharging begins, Laytime shall start” (Laytime Definitions 2013, term 20). Turn Time (TT) is the period granted in the Charter Party after Notice of Readiness (NOR) has been tendered but before Laytime begins. It is typically measured in hours. The 2013 commentary clarifies that while Definition 19 remains unchanged, Definition 20 allows Laytime to start earlier if operations commence before the official Laytime start.

• “Unless sooner commenced in which case actual time used to count” means that “the actual time used during Turn-Time (TT) will count as Laytime” (Laytime Definitions 2013, term 21). The 2013 commentary explains that although Laytime still starts per Charter Party terms, any time actually used before that point will be deducted from Laytime.

• Unless Used (UU) signifies that “if Laytime has already started but loading or discharging occurs during excepted periods, then the actual time used counts as Laytime” (Laytime Definitions 2013, term 22). The commentary confirms that “time used during excepted periods counts against Laytime.”

• Strike refers to coordinated industrial action by workers that results in a complete halt of their duties, directly affecting the ship’s operations. Refusals to work overtime, go-slows, or work-to-rule actions that do not cause a full stoppage are not considered Strikes. Strikes do not include their aftermath—such as Port congestion or disruptions to cargo transportation—once they have ended (VOYLAYRULES 1993, term 28). This term was removed in the Laytime Definitions 2013.

• Weather Working Day (WWD) or Weather Working Day of 24 Hours or Weather Working Day of 24 Consecutive Hours or Weather Permitting are further defined under Laytime Definitions terms 15, 16, 17, and 18.

Some of the most frequently used abbreviations relating to Laytime Exceptions:

• ATUTC: All Time Used to Count – Equivalent in meaning to the phrase “Unless Used”.
• EIU: Even If Used – Any time used for loading or discharging during excepted periods (such as Sundays or Holidays) will not count as Laytime, despite being actually used.
• FHEX: Fridays Holidays Excluded – Fridays and Holidays are excluded from Laytime.
• FHINC: Fridays Holidays Included – Fridays and Holidays are included in Laytime.
• SATPMSHEX: Saturdays Post Meridiem Sundays Holidays Excluded – Time after 1200 on Saturdays, along with Sundays and Holidays, does not count as Laytime.
• SHEX: Sundays Holidays Excluded – Sundays and Holidays are not counted as Laytime.
• SHINC: Sundays Holidays Included – Sundays and Holidays are included as part of Laytime.

Final Analysis and Result of Laytime

The completion of cargo operations—specifically, the point at which loading or discharging ends—is the decisive factor that determines the outcome of Laytime calculation. At times, specific cargo-handling activities such as Trimming (T), Lashing (L), or Securing (S) may be required, and the time spent on these tasks would reasonably be included as Laytime. The Charter Party may also clarify whether the time spent checking the ship’s draught (draft) is to be counted as Laytime.

The final calculation will indicate whether the Shipowner or the Charterer is responsible for payment. If loading or discharging exceeds the Time Allowed, the Charterer must pay the Shipowner for the excess time. This may be done through Damages For Detention (DFD) or Demurrage (D).

The key distinction between these is that Damages For Detention (DFD) are considered Unliquidated Damages (UD)—the rate is not pre-agreed and may need to be set by an Arbitrator or Judge—whereas “Demurrage (D)” is treated as Liquidated Damages (LD), with a pre-agreed rate stated in the Charter Party. Since the first method may involve lengthy and costly legal proceedings, Shipowners and Charterers usually agree on a Demurrage (D) rate upfront to simplify the process. However, if delays are extensive, the Shipowner may claim Damages For Detention (DFD) in addition to or beyond the agreed Demurrage Rate (DR). These Damages might be assessed based on the ship’s Demurrage Rate (DR), or potentially at a higher amount that reflects lost Freight Revenue and increased Operating Costs.

As defined in Laytime Definitions 2013 (Term 30), “Demurrage is the agreed amount payable to the Shipowner in respect of delay to the ship once the Laytime has expired, for which the owner is not responsible. Demurrage shall not be subject to exceptions which apply to Laytime unless specifically stated in the Charter Party.”

The final sentence reflects the well-known phrase, Once On Demurrage, Always On Demurrage. The amount of Demurrage (D) is agreed upon in the Charter Party and is commonly quoted in US Dollars Per Day or calculated Pro Rata for part of a day.

Typically, Address Commissions (ADCOM) and Brokerages (B) are deducted from Demurrage (D) payments, though this must be clearly specified within the Commission/Brokerage Clause. It is worth noting that over time, both English law and US law have become more flexible in their interpretation of this traditional phrase. Today, each case is assessed individually, based on its specific facts and context.

In contrast, when a ship completes cargo operations within the allowed Laytime, the Charterer becomes entitled to receive Despatch Money (DM) (Dispatch Money), which is generally calculated as Half the Daily Rate of Demurrage (DHD: Despatch Half Demurrage).

According to Laytime Definitions 2013 (term 31), “Despatch Money or dispatch is the agreed amount payable by the Shipowner if the ship completes loading or discharging before the Laytime has expired.” Only a few Charterers are in a strong enough position to negotiate that the daily Despatch rate should match the daily Demurrage rate. For ships that typically experience quick turn-around in Port—such as Ro/Ro Ships, Car Carriers, or Coaster Ships—it is not uncommon for the Charter Party to include a Free Despatch provision, meaning no Despatch is payable. Generally, Despatch Money (DM) is not included in Tanker Voyage Charters.

Regarding Despatch Money (DM), the following definitions and terms are important:

• Despatch On All “Working Time Saved” (WTS) or “On All Laytime Saved” means that “Despatch Money (DM) shall be payable for the period between the completion of loading or discharging and the end of Laytime, excluding any periods that are excepted from Laytime” (Laytime Definitions 2013, term 32).

• Despatch On “All Time Saved” (ATS) means that “Despatch Money (DM) shall be payable for the time from the completion of loading or discharging to the end of Laytime, including any periods that would otherwise be excepted from Laytime” (Laytime Definitions 2013, term 33).

In addition, a comparison of key Despatch Terms and commonly used abbreviations is provided below:

• ATSBENDS or ATSBE: All Time Saved Both Ends — This Term indicates the method of Despatch Money (DM) payment. It is equivalent to the Term “DBEATS”. Despatch is payable:

◦ At both ends, meaning during loading and discharging operations;
◦ For the total of all time saved across both operations.

Accordingly, the Despatch amount is determined based on the Actual Time Saved from the early completion of both operations up to the expiration of the Total Laytime Allowed for both, including periods excluded from Laytime. See comparison with AWTSBENDS below.

• ATSDO: All Time Saved Discharging Only — Despatch Money (DM) is payable only for time saved during the discharging operation. It is calculated based on the Actual Time Saved from the completion of discharging until the end of Laytime allowed for discharging, including periods excluded from Laytime.

• ATSLO: All Time Saved Loading Only — Despatch Money (DM) is payable solely for time saved during the loading operation. It is calculated from the completion of loading to the expiration of Laytime allowed for loading, including periods excluded from Laytime.

• AWTSBENDS, AWTSBE, ALTSBENDS, or ALTSBE: All Working Time Saved Both Ends or All Laytime Saved Both Ends — This Term defines the Despatch Money (DM) payment method. It is synonymous with DBELTS. Despatch is payable:

◦ At both ends, i.e. for both loading and discharging operations;
◦ Only for the Working Time Saved in total across both ends.

Thus, the Despatch amount is based on All Working Time Saved from the early completion of both operations until the expiry of the total Laytime allowed for both, excluding periods that are excepted from Laytime. Refer to ATSBENDS above for comparison.

• AWTSDO or ALTSDO: All Working Time Saved Discharging Only or All Laytime Saved Discharging Only — Despatch is payable for Working Time Saved solely during discharging. It is calculated from the completion of discharging to the expiry of Laytime allowed for discharging, excluding periods excepted from Laytime.

• AWTSLO or ALTSLO: All Working Time Saved Loading Only or All Laytime Saved Loading Only — Despatch Money (DM) is payable for Working Time Saved exclusively for the loading operation. It is assessed from the completion of loading to the expiry of Laytime allowed for loading, excluding any excepted periods.

• DBEATS: Despatch Payable At Both Ends On All Time Saved — A synonym for ATSBENDS. Despatch is due at both ends, covering loading and discharging, for all time saved in total across both operations.

• DBELTS: Despatch Payable At Both Ends On Laytime Saved — Equivalent to AWTSBENDS. Despatch is paid at both ends, i.e. during loading and discharging, for all Working Time Saved in total from both operations.

Demurrage (D) and Damages For Detention (DFD)

The commonly known phrase Once On Demurrage, Always On Demurrage implies that Exception Clauses are not applicable to Demurrage unless they are expressly stated to have such an effect.

Generally, this means that once Laytime ends and the ship is on Demurrage, all subsequent time (24 hours a day, 7 days a week) is counted regardless of factors such as weather delays, holidays, strikes, etc. However, time may be excluded if the delay is caused by the Shipowner, the Shipowner’s personnel, or due to an issue arising from the ship itself. The definition of “fault” in this context is unclear—it could mean Negligence, Unseaworthiness, or something like the ship’s inability to supply power to winches.

In essence, when the ship is on Demurrage, it is not always certain whether Shipowners are fully responsible for any delay from the ship’s side or only for delays resulting from Negligence on the part of the Shipowners, the Ship Master, or the crew. In Tanker Charter Parties, it is common for specific exceptions to be included for Demurrage. This is often structured using language that states certain events “shall not count for Laytime or as time on Demurrage” if they occur.

The Demurrage Rate (DR) is the agreed-upon compensation owed to Shipowners when loading and/or discharging exceeds the permitted time. The Demurrage Rate (DR) is typically set as a specific amount per 24 hours or calculated pro rata. Since Demurrage represents a form of Liquidated Damages (LD) pre-agreed between Shipowners and Charterers, Shipowners are not required to prove their actual loss. Even if Shipowners can demonstrate that their loss exceeds the Demurrage compensation, they are still only entitled to the agreed Demurrage Rate (DR). Conversely, if the actual loss is less, Shipowners still receive full Demurrage.

In some cases, the period for which Demurrage applies may be limited. For example, such a restriction is included in GENCON 1976 (part II, clause 7 “Demurrage”): “Ten running days on Demurrage at the rate stated in Box 18 per day or pro rata for any part of a day, payable day by day, to be allowed for Merchants altogether at Ports of loading and discharging.” This ten-day cap is removed in the GENCON Charter Party Form 1994.

When Demurrage time is contractually capped and the full allotted Demurrage period has been used, Shipowners may claim Damages For Detention (DFD). In making a claim for Damages For Detention (DFD), Shipowners must provide evidence of actual loss. In such cases, the Demurrage Rate (DR) may serve as Prima Facie Evidence, and often neither party addresses any distinction after Demurrage time ends. Still, understanding the difference between Damages For Detention (DFD) and Demurrage (D) is essential, as the financial implications can be significant. The primary distinction lies in that Damages For Detention (DFD) constitutes Unliquidated Damages, meaning the compensation amount is not pre-agreed and must be proven, whereas Demurrage is classified as Liquidated Damages (LD), established in advance in the Charter Party. Since the former approach can be costly and time-consuming, most parties prefer to set a Demurrage rate in the Charter Party.

Alternatively, instead of capping Demurrage (D) and resorting to Damages For Detention (DFD), Shipowners and Charterers may agree on a tiered or escalating Demurrage Rate (DR). For example: “Demurrage for the first 9 days is agreed to be US$10,000 per 24 hours, thereafter US$15,000 per 24 hours.”

Clauses that restrict the duration of Demurrage do not address the complex issue that arises when the Shippers fail to provide the agreed cargo quantity and the Charterers do not declare that no more cargo will be available. In such cases, it becomes challenging for the Shipowners to determine whether to instruct the ship to depart or wait for the balance of the cargo. If the Demurrage Rate (DR) is adequate and the Charterers continue to pay Demurrage, the Shipowners might not be negatively affected. However, when the rate is low and/or payments are not made and/or the Shipowners have other commitments for the ship, it is advisable to seek legal counsel to determine the appropriate course of action.

Typically, Demurrage is calculated and paid after the cargo has been fully discharged and delivered. If the Shipowners intend to have the option of exercising a Lien on the cargo to secure their Demurrage claim, it must be clearly stated in the Charter Party that Demurrage Is Payable Day By Day. Without such a provision, the timing of Demurrage payment remains ambiguous, making it difficult for the Shipowners to assert a Lien on the cargo as security. GENCON 1976 (part II, clause 7 “Demurrage”) includes such wording, specifying that Demurrage is payable “day by day.” In GENCON 1994 (part II, clause 7 “Demurrage”), the clause is revised as follows:

“Demurrage at the loading and discharging Port is payable by the Charterers at the rate stated in Box 20 in the manner stated in Box 20 per day or pro rata for any part of a day. Demurrage shall fall due day by day and shall be payable upon receipt of the Owner’s invoice.”

Should the Demurrage remain unpaid in accordance with this provision, the Shipowners may issue a Written Notice to the Charterers, allowing 96 running hours for rectification. If the payment is not made within that time and the ship is still at the loading Port, the Shipowners have the right to terminate the Charter Party and Claim Damages for any resulting losses (GENCON ’94, part II, clause 7 “Demurrage”).

Despatch Money (DM)

When loading is completed more quickly than the allowed Laytime, the ship is considered to have been released earlier back to the Shipowner’s control. This benefits the Shipowners, who may agree to return a portion of the compensation to the Charterers. This reimbursement is known as Despatch or Dispatch and, in dry cargo Charter Parties, it is typically agreed to be Half the Demurrage Rate (DHD: Despatch Half Demurrage). In some instances, such as in Tanker Charters, No Despatch is payable unless an Additional Clause (Rider Clause) is included.

Despatch may be calculated through different approaches. In some agreements, Charterers receive Despatch for “All Time Saved”, while in others, only for All Working Time Saved.

Under the All Time Saved model, Charterers are compensated for the entire duration actually saved by the Shipowners. This covers the full running time from the moment the ship became ready until the theoretical expiry of Laytime, assuming the ship had still been in Port. Therefore, Laytime Exceptions are not considered in this Despatch Calculation.

Conversely, with the All Working Time Saved approach, compensation is based solely on the remaining Laytime available after the ship has been fully loaded and/or discharged. Here, all Laytime exceptions are applied to the Despatch Calculation, and any such time is excluded from the Despatch Money (DM).

Charter Parties do not always specify the timing for Despatch payments. In trades where Despatch is commonly agreed upon and expected, it is not unusual for Charter Parties to state that a portion of the Despatch amount should be paid once time counting for the voyage commences. The final settlement of Despatch is then offset against the remaining Freight.

Stages and Documents of Laytime Calculations

A commonly applied method for Laytime Calculation is recommended for regular use, although both the Shipowner and the Charterer might have their own approaches and formats suited to their individual needs. The use of Standard Charter Party Forms can help minimize potential areas of disagreement. The typical stages involved in Laytime Calculation include:

• Identifying the point at which Laytime commences;
• Establishing the total duration of Laytime;
• Evaluating any interruptions to Laytime;
• Determining when Laytime ends;
• Conducting the final review and computing the amount of Demurrage or Despatch.

To carry out accurate Laytime Calculations, the Shipbroker requires access to the following documents:

• Copy of the Voyage Charter Party: The Shipbroker must thoroughly review all Charter Party Clauses outlining the exact time permitted for loading or discharging, and the specific terms related to when Laytime starts, pauses, or ends. In addition, the Shipbroker should account for clauses that define “Laytime”, explain the “Arrived Ship”, and detail how, when, and where the Notice of Readiness (NOR) should be issued, including any particular requirements.

• Copy of Notice of Readiness (NOR): This is an official communication from the ship indicating that it is in a state of Readiness, either to load or discharge cargo, at the time the Notice of Readiness (NOR) is tendered. Upon arrival at the standard anchorage at the loading Port, the Ship Master or Port Agent must inform the Charterer or their representative via letter, email, wireless, or phone that the ship is ready to load. If the ship is not yet at the Berth, Notice of Readiness (NOR) may be submitted through email, fax, or any other modern method explicitly accepted in the Charter Party, including via the Port Agent on behalf of the ship. A physical version of the Notice of Readiness (NOR) is later completed and signed once the ship berths. It is the responsibility of the Ship Master—or possibly the Port Agent—to ensure proper submission of the Notice of Readiness (NOR). The ship does not need to have been inspected, cleaned, or granted free pratique to present a valid Notice of Readiness (NOR). However, should the ship fail an inspection afterward, the Notice of Readiness (NOR) could be rendered invalid. A new Notice of Readiness (NOR) must then be issued following a successful re-inspection. This Notice plays a critical role in notifying the Charterer of the ship’s Readiness so cargo preparations can proceed. As stated, the delivery and acceptance of Notice of Readiness (NOR) is one of the key actions that trigger the start of Laytime. Laytime begins after the Ship Arrives and is both Physically Ready and Legally Ready to perform cargo operations, provided that a valid Notice of Readiness (NOR) has been properly issued by the Ship Master or Port Agent. The Charter Party may specify that Laytime begins after a predetermined period or a set duration following the Tendering and Acceptance of Notice of Readiness (NOR). Normally, at the discharging Port, no Notice of Readiness (NOR) is required unless the Charter Party includes a specific clause stating otherwise.

• Statement of Facts (SOF): This document is attached to the Time Sheet (TS) and outlines events that take place during the ship’s time at Port, which could impact the counting of Laytime. Prepared by the Port Agent, the Statement of Facts (SOF) is sent to the Shipowner after the ship departs. Both Shipowners and Charterers may use their own Statement of Facts (SOF) and Time Sheet (TS) formats. However, standard Statement of Facts (SOF) templates have been created by BIMCO and are endorsed by FONASBA. These forms include key data that the Shipbroker uses for Laytime Calculation. This includes, among other details, the dates and times for Tendering the Notice of Readiness (NOR), the start and end of cargo operations, daily progress, and any reasons for delays. Every party involved in the ship’s Port operations must sign this document. It includes spaces for signatures from the Port Agent who drafts it, the Ship Master, and a Charterer representative.

• Time Sheets (TS): These serve as detailed logs or diaries that track all activities—whether related to cargo operations, Laytime Exceptions, or waiting periods. Known as Time Sheets (TS), they provide a clear record of whether the allowed Laytime has been exceeded or not fully utilized.

Time Sheets (TS)

Time Sheet (TS) generally contains the following information:

• Date and time when the ship arrives at the loading or discharging Port.
• Date and time of the ship’s arrival at the loading or discharging Berth.
• Date and time when the ship becomes physically and legally ready to begin loading or discharging.
• Date and time when Notice of Readiness (NOR) is issued.
• Date and time when Notice of Readiness (NOR) is accepted by the Charterers.
• Date and time when loading/discharging operations begin.
• Dates and hours during which loading/discharging activities take place.
• Date and time when LAYDAYS commence.
• Loading and discharging rates as specified in the Charter Party clauses.
• Laytime interruptions based on the Charter Party terms.
• Daily quantities of cargo loaded or discharged.
• Total amount of cargo loaded or discharged.
• Statement of the time allowed for loading and discharging as per the Laytime Clause in the Charter Party.
• Date and time of completion of loading/discharging.

Time Sheet (TS) accuracy depends on several key factors:

• The Definition of Laytime: whether Laytime is fixed, measurable, or uncertain.
• The Category of Laytime: whether calculations are done separately for loading and discharging Ports, or whether the Charterer has the option to reverse or average the Laytime.
• Laytime Calculation Method: the Charter Party’s Laytime clause will define the calculation process, which may include specific phrases or exceptions like “per workable hatch per day” or “Sundays and holidays excepted, unless used.”
• Commencement of Laytime: the Laytime clause will specify the waiting time (if any) after a valid Notice of Readiness (NOR) is tendered.

Although BIMCO has developed standard Time Sheet forms, some shipping companies prefer to use their own templates.

Tanker and Dry Bulk Carrier Laytime Calculations

The sections below highlight the unique challenges involved in calculating Laytime for liquid and dry cargoes.

Tanker Laytime Calculations

Compared to Dry Bulk Carrier Laytime Calculations, calculating Laytime for Tankers is generally more straightforward. This is because the dry bulk cargo sector involves a greater number of Shipowners and Charterers, global trading activity, visits to less developed Ports, and a wide variety of Charter Party Forms that include many different Laytime terms. By contrast, although there are many tanker owners, the number of Tanker Charterers is smaller. Tankers typically operate between fewer, more technologically advanced Ports, and there are fewer Tanker Charter Party Forms, many of which have similar Laytime provisions.

In Tanker Charters, Laytime begins when a valid Notice of Readiness (NOR) is tendered. Unless the Tanker Charter Party specifies otherwise, the time at which Notice of Readiness (NOR) is accepted is generally irrelevant.

In most Tanker Charter Party Forms, if the tanker arrives and anchors due to a Berth being unavailable, time begins six (6) hours after the Notice of Readiness (NOR) is tendered. If the tanker proceeds directly to the Berth without delay, time begins either upon Berthing or when loading/discharging starts—depending on what the Charter Party Form stipulates. For example, BPVOY 4 (part 2, clause 7.3.2 “Laytime/Demurrage”) contains the following clause:

“Laytime, or if the ship is on Demurrage, Demurrage shall commence, at each loading and each discharge Port, upon the expiry of six (6) hours after a valid Notice of Readiness (NOR) has become effective as determined under Clause 6.3, Berth or no Berth, or when the ship commences loading, or discharging, whichever first occurs.”

Clause 7 of BPVOY 4 remains mostly unchanged but is now listed as clause 11 in the newer BPVOY 5.

In Tanker Charter Parties, the duration of Laytime is often defined by Worldscale Hours Terms and Conditions (WSHTC or WHTC). When such terms are included, Laytime is calculated based on the latest edition of Worldscale (WS). This guide, often referred to as the “commercial handbook” for tanker chartering professionals, is released annually by Worldscale Association (London) Limited and Worldscale Association (NYC) Inc. The 2015 edition of Worldscale (WS) states in preamble, part B.2 “Laytime”:

“Time allowed for loading and discharging shall be 72 hours and shall be subject to whatever qualifications, if any, that are stated in the applicable Charter Party or contract.”

However, it is not uncommon for a Tanker Charter Party to stipulate that total Laytime will be 96 Hours instead of 72. In some cases, Laytime may be based on a daily cargo handling rate instead. This approach is often used in trades such as vegetable oil transport, where different handling rates may apply to loading and discharging operations.

In Tanker Charter Parties, it is a common practice for Laytime to extend beyond the completion of loading or discharging, unlike in Dry Bulk Cargo Laytime, where it usually ends when operations are finished. In tankers, Laytime generally continues until the hoses have been disconnected.

Some Shipowners who experienced additional delays after hose disconnection—often due to waiting for documentation—have submitted Claims For Detention. As a result, certain Charter Party Forms have been modified to include clauses addressing these delays, often stating that “time will count if the ship is delayed for Charterers’ purposes beyond a specified period, typically 3 hours, after disconnection of hoses.”

Once a valid Notice of Readiness (NOR) has been tendered and the tanker is in Port, all subsequent time generally counts as Laytime unless the delay is caused by the tanker or is excluded by an express clause in the Charter Party.

Similar to Dry Bulk Cargo agreements, certain events in tanker operations can suspend Laytime. Common examples of Excepted Periods in tanker Laytime practices include:

• Breakdowns or inefficiencies involving the tanker, such as pumping issues at the discharge Port or inadequate heating coils within the cargo tanks. In the case of pumping delays, Tanker Charterers may argue that the tanker is underperforming, while Shipowners often counter that excessive back-pressure in shore lines caused the problem. For heating issues, Shipowners may attribute delays to low ambient temperatures affecting extended shore piping.

• Delays caused by the Shipowner’s fault, or by subcontractors for whom the Shipowner is responsible, which are outside the Charterer’s control.

• Shifting from anchorage to Berth after Notice of Readiness (NOR) has been tendered generally suspends Laytime.

• Bad Weather does not typically affect tanker operations as significantly as it does in Dry Bulk Cargo trades. However, in areas prone to swell or other adverse weather, delays can occur—especially during Berthing. This issue is addressed in most printed Tanker Charter Party Forms and Additional Clauses (Rider Clauses). Some clauses explicitly state that weather delays do not count as Laytime, while others use indirect wording such as “Delays Beyond Charterers’ Control Shall Not Count.” For instance, SHELLVOY 6 (part II, clause 13.1(a) “Notice of Readiness (NOR)/Running Time”) does not exclude bad weather delays occurring after Berthing, but such time does not count if weather prevents Berthing. Other forms, such as EXXONVOY ’90 and BPVOY 4, treat bad weather time as half Laytime. The widely used Conoco Weather Clause provides: “delays in Berthing for loading or discharging and any delays after Berthing which are due to weather conditions shall count as one half Laytime or as time on Demurrage at one half demurrage rate.”

• Delays arising from conditions at nominated Ports, provided these are not due to the Charterer’s fault or neglect, or that the Ship Master could not have avoided them with reasonable care. A specific note should be made regarding Strikes. While Dry Cargo Charter Parties often include strike-related clauses, this is less common in Tanker Charter Parties. This is largely because Strikes have historically caused minimal disruption at oil terminals, which are often operated under contract by or for major oil companies. Terms like “strike” and “labour dispute” usually appear in general clauses stating that delays from Strikes count as Half Laytime or Half the Demurrage Rate. The term “Strike” typically refers to a collective refusal by workers to perform duties due to grievances, and it is generally accepted that this also includes sympathy strikes.

• Delays from Crude Oil Washing (COW) and Disposal of Residues: Crude Oil Washing (COW) is generally carried out in compliance with MARPOL (International Convention for the Prevention of Pollution from Ships, 1973 and its 1978 Protocol). Tanker Charterers may impose further requirements, and these can affect Laytime. MARPOL prohibits discharging residues at sea; they must be retained on board. Modern Tanker Charter Party Forms typically include provisions giving Charterers the right to discharge residues ashore, compensating the Shipowner for any lost Freight due to segregation and retention (e.g., SHELLVOY 6, part II, clause 40 “Oil Pollution Prevention/Ballast Management”). While many Tanker Charterers are willing to take residue oil and pay Freight on it, shore facilities may reject incompatible residues. Notably, ASBATANKVOY is the only form that always obliges the Charterer to arrange for shore discharge of residues. A well-drafted residue disposal clause should address situations like multiple Tanker Charterers or the absence of facilities at the loading Port. From a Laytime perspective, SHELLVOY 6 (part II, clause 40(5)) states:

“Whenever Charterers require the collected washings to be discharged ashore pursuant to this clause, Charterers shall provide and pay for the reception facilities, and the cost of any shifting therefore shall be for Tanker Charterers’ Account. Any time lost discharging the collected washings and/or shifting therefore shall count against Laytime or, if the ship is on Demurrage, for Demurrage.”

• Force Majeure events causing unexpected interruptions or hindrances to loading or discharging.

In Tanker Chartering, when cargo is loaded faster than the allowed Laytime, Shipowners typically do not owe Despatch Money (DM). This marks a key difference from Dry Bulk Cargo Laytime practices. If Laytime is exceeded, however, the Tanker Charterer must pay the Shipowner Demurrage, which may be structured in two primary ways:

• As a Daily Rate — This is the most common format, expressed in US Dollars per day, and negotiated to reflect the expected daily return for the Shipowner.
• By referencing Worldscale (WS) — In the Worldscale preamble, part C contains a table outlining Demurrage rates for all tanker sizes.

Dry Bulk Cargo Laytime Calculations

Determining Laytime for Dry Bulk Cargo tends to be more complex than for Tankers, primarily due to the numerous factors affecting dry cargo operations that do not impact Tankers. These include variations in the nature and handling requirements of the cargo, the capabilities of the Port and the ship, and the acknowledgment that loading can take significantly longer than unloading—or vice versa.

Laytime for Dry Bulk Cargo begins either right away, after a designated period (Notice Time), or at a specified time following the issuance and acceptance of the Notice of Readiness (NOR).

For Tankers, Laytime is generally defined as a total of 72 hours for both loading and discharging. In contrast, Laytime for Dry Bulk Cargo can be stated in various ways within the Charter Party. It may be Fixed Laytime, Calculable Laytime, or Indefinite Laytime. When Laytime is Fixed or Calculable, it offers more predictability in evaluating cargo operation durations. However, if Laytime is Indefinite, it introduces potential complications. The following provides further insights into the specific nature of Laytime in Dry Bulk Cargo contexts.

As mentioned, Laytime can be established as Fixed Laytime through clear language in the Charter Party, such as a set number of days, Running Days (RD), Working Days (WD), Weather Working Days (WWD), 24 Hours, or 24 Consecutive Hours. Typically, the Charterer proposes the Laytime Terms based on experience with the cargo, Ports, stevedores, and equipment, while the Shipowner negotiates using their knowledge of the ship. Ultimately, the Charter Party’s Laytime terms reflect the balance of negotiating power between Shipowners and Charterers.

Laytime may also be calculated based on the rate of cargo loading or discharging. Since ships are loaded and unloaded at varying daily speeds, especially during operations spanning several days, the Charter Party often includes the phrase Average Rate Of to define these rates.

For instance, in bulk cargo discharge, it is common to see rapid progress at first when removing cargo from the top, followed by a slower pace when handling remaining cargo at the bottom and sides of the holds. The phrase “Average Rate Of ” helps describe the expected Laytime Duration and prevents Shipowner claims if slower discharging occurs on specific days.

Laytime Calculation can become more complex when tied to the number of Workable Hatches or Hatches, a method used less frequently and mostly in specific regions.

A Cargo Hatch is the deck opening used to load or unload cargo into or from the cargo holds. The term Per Workable Hatch Per Day generally benefits Charterers more than Shipowners. A Hatch is Workable if there is cargo in the hold beneath it.

If the corresponding hold is empty or remains unused, the Hatch is not considered Workable. Therefore, Workability relates to the cargo below and not to whether the ship has equipment such as cranes or derricks above the Hatch.

Alternatively, Per Hatch Per Day may be used for Laytime calculations, based on the number of cargo hatches on the ship. Even if a Hatch lies over an unused compartment, it still qualifies as a Hatch, though not necessarily as a Working Hatch.

The type and number of hatches will affect cargo-handling rates and thereby influence Laytime Calculation. However, this approach overlooks the fact that different hatches and holds may be worked at varying speeds. It also fails to account for multiple hatches serving a single cargo hold. Variations in handling rates may be due to different Cargo Hold sizes, Stevedore Gangs, equipment types, or even safety and stability plans that dictate the cargo handling sequence.

Lastly, Laytime may be Indefinite if defined using terms like Per Custom of the Port or As Fast As Can (FAC). When Charter Parties use the Fast As Can (FAC) clause—particularly for self-discharging or belt self-unloading bulk carriers—it becomes essential for the Charterer to ensure a minimum take-away speed is maintained.

The calculation of dry bulk cargo Laytime is significantly influenced and thus subject to interruption by both physical factors—such as rain and Bad Weather—and non-physical occurrences—such as Sundays and Holidays. Below are some common examples of Excepted Periods encountered in dry bulk cargo Laytime procedures:

• Malfunctions or inefficiencies on the part of the ship, like breakdowns in the ship’s gear. It is logical that when the ship’s gear is operational and subsequently fails, Laytime should be paused for the duration of the breakdown.

• Moving between Berths. The time used for shifting between Berths is usually considered the responsibility of the Shipowner, meaning this period is not counted as Laytime. That said, this can vary depending on the negotiated terms and wording of the Charter Party.

• Weekends and Holidays. When cargo work is carried out during an excepted period, such as under a SHEX (Sundays Holidays Excluded) Term, Laytime does not accrue unless explicitly allowed by the Charter Party—using phrases such as “time not to count during weekends Unless Used (UU)”.

• Strikes: The Strike Clause can have a substantial impact on Laytime. Some versions directly address time counting, while others are more ambiguous, making it challenging to determine whether they affect Laytime. Generally, drafting and interpreting Strike Clauses is complex. A standard approach in Charter Parties is to state that delays due to shore-based Strikes are excluded from Laytime. For example, under GENCON ’94 (part II, Clause 16 General Strike Clause), the Shipowner may cancel the Charter Party if a Strike or Lockout interferes with cargo loading—unless the Charterer agrees to “reckon the LAYDAYS as if there was no strike or lockout .” Additionally, the clause outlines that if a portion of the cargo has already been loaded prior to the Strike, the Shipowner is entitled to sail with that portion, earn Freight for it, and may complete the voyage with other part-cargo. At the discharging Port, if the Strike is not resolved within 48 Hours of the ship’s arrival, the Receiver has the option to divert the ship to another Port or allow it to wait while paying Half Demurrage (HD) after the Laytime has expired.

• Any delays caused by the Fault of the Shipowner, for which the Charterer holds no responsibility, will also not count. The same applies to any Faults committed by Subcontractors acting under the Shipowner’s responsibility.

• Bad Weather poses major challenges during the loading and discharging of dry bulk cargo. Consequently, such weather typically suspends Laytime counting. However, the actual treatment depends entirely on how the Charter Party terms have been negotiated.

• Force Majeure. Laytime may also be suspended due to Force Majeure circumstances—events that are completely Unforeseeable and beyond the control of either party. For instance, if the Charterers are unable to supply cargo at the loading Port due to Force Majeure, such delay is excluded from Laytime under a specific Force Majeure Clause.

In cases where cargo has only been partially loaded and a Laytime Exception takes place, it can be challenging to draft a clause that anticipates all scenarios and remains fair to both sides. A commonly accepted solution is to allow the ship the choice either to remain until the loading is finished or to depart and complete the loading of remaining cargo while en route.

If loading or discharging of cargo exceeds the time allowed by the agreed Laytime, the Charterer must provide compensation to the Shipowner for the time lost. This compensation may come in the form of Damages For Detention (DFD) or Demurrage (D).

In dry bulk cargo operations, Demurrage (D) is typically stated as US Dollars Per Day or Pro Rata. On the other hand, if loading is completed in less time than the allowed Laytime, the Charterer is rewarded with Despatch Money (DM) or simply Dispatch, which is often agreed to be Half the Demurrage Rate. This term appears in nearly all dry cargo Charter Parties, except for GENCON 1994—although even then it is frequently included as an Additional Clause (Rider Clause).

More than one Charterer for a Specific Voyage

Another scenario that may complicate the calculation of Laytime arises when multiple Charter Parties are active for a single voyage. This situation can occur when a Shipowner enters into a Voyage Charter with several Charterers, each providing only a part cargo for the ship. In such cases, Laytime Calculations must be conducted individually for each Charterer.

As long as the Statement of Facts (SOF) is detailed and clearly identifies the timing and the specific holds used for loading or discharging the respective part cargoes, tracking the Laytime used for these operations should not pose major issues. However, time lost while awaiting a Berth or during other idle periods may easily lead to disputes between Shipowners and Charterers. Therefore, Shipowners intending to Voyage Charter to multiple Charterers for the same voyage are advised to define precise clauses during Chartering Negotiations to address these potential concerns proactively.

Importance of all Charter Party provisions

Laytime Calculation may also be affected by additional provisions and circumstances beyond those found in standard Laytime Clauses. It is essential that, both during Chartering Negotiations and when performing the actual Laytime Calculation, all relevant Charter Party terms with a bearing on Laytime matters be carefully reviewed and taken into account.

Comparing “Laytime Definitions 2013” with “VOYLAYRULES 1993”

The most notable distinctions between these two sets of Laytime standards are outlined in BIMCO’s special circular from September 2013. The key points from that document are summarized below:

• Laytime Definitions 2013 returned to the original 1980 format and were once again structured as definitions, unlike VOYLAYRULES 1993, which were introduced as an independent code with notable deviations from commonly accepted practices—such as merging three types of Weather Working Day into one Rule.

• The organizations backing the project (BIMCO, FONASBA, CMI, and Baltic Exchange) agreed that the previous format limited the adoption of VOYLAYRULES and that a refreshed approach was necessary. This led to the return to a definitions-based format, aligning the content with present-day commercial needs and the current principles of English law.

• Numerous VOYLAYRULES provisions underwent both editorial and substantive revisions.

• Separate descriptions were again provided for the various interpretations of Weather Working Day (WWD).

• New definitions such as Always Accessible (AA) and Whether in Port or Not (WIPON) were introduced.

• The term Strike, which appeared in VOYLAYRULES, was removed in the 2013 version, as its meaning and effects are typically addressed individually in each Charter Party.

• The phrase “In Writing” was also excluded from the new edition, as many Charter Parties—particularly those from BIMCO—already contain a clause covering that aspect.

• The use of abbreviations has been significantly minimized, due to the lack of universally agreed meanings. While some parties may understand specific acronyms within their exchanges, these can often be misinterpreted. Laytime Definitions 2013 only retain abbreviations for Whether in Berth or Not (WIBON) and Whether in Port or Not (WIPON), which are widely recognized across the industry.

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