Reversible Laytime

In voyage chartering, permitting charterers to add up the laytime allowed for loading and discharging is called Reversible Laytime. In other words, any time saved (or exceeded) at the load port can be carried forward to the discharge port. Depending on the drafting of the relevant clause, charterers may only have a limited period of time for deciding whether to reverse.

In Reversible Laytime, excepted days must not be added to (or subtracted from) the laytime. For example, laytime for loading is five (5) weather working days of 24 consecutive hours. Sundays are excepted (SHEX). If laytime commences on a Thursday and the ship completes loading on Saturday, then in the normal course of events, laytime at the load port would have expired on the Tuesday. In theory, by being able to depart on the Saturday, ship has saved three (3) calendar days. However, three (3) days may not be transferred to the time available to be used at the discharge port. Days which have been saved at the load port are the Monday and the Tuesday only. On this example, only two (2) days can be added to the time available at the discharge port.

In opposite case, where time has been exceeded at the load port. Time allowed at the load port is five (5) days, if laytime were to commence on Monday, laytime would expire on Friday. If loading was not completed until the following Monday, the excess time of three (3) calendar days would have been used and the ship would have been on demurrage for three (3) days. However, if laytime were to be reversed in this case, only two (2) days (Saturday and Monday) would have to be borrowed from the time allowed for discharging.

Although Average Laytime and Reversible Laytime have the same objective, the outcome will be different according to whether the charter-party allows the charterers to average or to reverse the laytime.

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Reversible Laytime in Ship Chartering

In the shipping industry, the concept of “laytime” is crucial when it comes to the chartering of ships. Laytime is the amount of time agreed upon between the charterer and shipowner for loading and unloading the cargo at the port. If the actual loading or unloading takes longer than the agreed laytime, the charterer is usually required to pay a penalty, often referred to as “demurrage”. If the operations are completed within the agreed time, or less, the charterer may be entitled to a refund, often referred to as “despatch”.

Reversible laytime is a concept that provides additional flexibility for the charterer. Under a reversible laytime clause in the charter party agreement, the time allocated for loading and unloading can be used interchangeably. That is, if less time is spent loading at the loading port, the saved time can be used to extend the unloading time at the discharging port, and vice versa.

For example, let’s say a charter party agreement allows for 5 days of laytime at the loading port and 5 days at the discharging port, and it includes a reversible laytime clause. If the charterer only uses 3 days at the loading port, then the remaining 2 days can be added to the laytime at the discharging port, giving the charterer a total of 7 days to unload.

This flexibility can be very beneficial for the charterer because it reduces the risk of having to pay demurrage, especially when there are uncertainties about how long loading or unloading will take at each port. However, shipowners might charge higher freight rates for charter parties with reversible laytime clauses because of the potential for increased unpredictability and delay in their ship’s schedule.

While the concept of reversible laytime can be quite beneficial for charterers, it is important to remember that its applicability and the specifics will be dictated by the exact terms of the charter party agreement. Some agreements might specify that the laytime can only be reversed in certain ways or under certain conditions. For example, the agreement might state that the laytime can only be reversed if the ship arrives at the unloading port by a certain date, or if the ship is not delayed by unforeseen circumstances like bad weather.

Another important consideration is that the use of reversible laytime might affect the charterer’s obligations under the contract. For example, if the charterer uses more time at the loading port and less at the unloading port, the charterer might still be responsible for any additional costs incurred as a result, such as port charges for the extra time spent at the loading port.

From a shipowner’s perspective, reversible laytime clauses can lead to increased unpredictability in the ship’s schedule. This is because the actual laytime used at each port can vary depending on how efficiently the charterer manages the loading and unloading operations. Therefore, when agreeing to a reversible laytime clause, shipowners need to consider the potential impact on their scheduling and operational efficiency. They might need to build in some extra buffer time in their schedule to account for this variability.

Reversible laytime is a complex concept that can have significant implications for both charterers and shipowners. It’s important for both parties to fully understand the implications and to negotiate the terms of the charter party agreement carefully. Professional advice should be sought when dealing with such complex contractual issues, to ensure that all potential risks are fully understood and mitigated as far as possible.

Reversible Laytime Vs Average Laytime

Laytime, in the context of maritime law, is the amount of time agreed between parties during which a vessel will be available for loading or discharging cargo without additional costs. It’s a significant part of charter party agreements. There are different types of laytime used, and your question refers to two of these: Reversible Laytime and Average Laytime.

1. Reversible Laytime:

Reversible laytime is a concept in maritime law where the laytime allocated for loading and discharging operation is pooled. In simpler terms, it means that the laytime for loading and unloading can be used interchangeably. For example, if a vessel is chartered for loading at port A and discharging at port B, and the charter party agreement stipulates a laytime of 5 days each for loading and discharging, if loading takes 3 days instead of 5, the extra 2 days can be used at port B for discharging. This type of laytime clause provides flexibility, as it allows for the transfer of unused laytime from one operation to another.

2. Average Laytime:

Average laytime, also known as averaged laytime or laytime averaged, is a method of calculating laytime whereby the time allowed for loading and discharging is averaged. This means that the total laytime is calculated as the sum of the time spent on loading and discharging, divided by the number of operations (usually the number of ports). If the charter party agreement stipulates averaged laytime, the time saved on one operation can be used to offset the time lost on another.

In both cases, the intention is to allow for greater flexibility in the allocation of time for cargo operations, and to reduce the likelihood of demurrage (additional charges when laytime is exceeded) or despatch (a refund paid by the shipowner to the charterer when the operations are completed in less than the agreed laytime).

It’s important to note that the specific definitions and terms can vary based on the terms of the charter party agreement, and the specific details should always be clearly defined and agreed upon by all parties involved.

 

Reversible Laytime Calculation Example 1

let’s discuss a simple example of reversible laytime calculation. “Laytime” refers to the time agreed between the parties during which the owner will make the ship available for loading or discharging without payment beyond the freight.

“Laytime Reversible” means that the laytime allowed to the charterer for loading and discharging is considered as one time period. If the total time used for loading is less than the agreed laytime, the balance can be used for discharging, and vice versa.

Let’s say we have a situation where:

1. The agreed reversible laytime is 10 days.
2. The loading time actually used is 4 days.
3. The discharging time actually used is 6 days.

Here’s how we would calculate:

1. Add up the total time used for loading and discharging:

   Loading time: 4 days Discharging time: 6 days Total time used: 4 days + 6 days = 10 days

2. Compare this to the agreed reversible laytime:

   Agreed reversible laytime: 10 days Total time used: 10 days

3. In this example, the charterer has used exactly the agreed laytime. So, there is no laytime left over for loading or discharging, and there is no demurrage (extra charge for using the ship beyond the agreed laytime) to be paid.

If, however, the total time used was more than the agreed laytime, the charterer would have to pay demurrage for the extra time. If the total time used was less than the agreed laytime, the charterer would have saved on the potential demurrage cost.

 

Reversible Laytime Calculation Example 2

Let’s look at another example of reversible laytime calculation, this time involving demurrage.

Assume that:

1. The agreed reversible laytime is 12 days.
2. The loading time actually used is 8 days.
3. The discharging time actually used is 7 days.
4. The demurrage rate agreed is $2000 per day.

Here’s how to calculate:

1. Add up the total time used for loading and discharging:

   Loading time: 8 days Discharging time: 7 days Total time used: 8 days + 7 days = 15 days

2. Compare this to the agreed reversible laytime:

   Agreed reversible laytime: 12 days Total time used: 15 days

3. In this example, the charterer has used more time than the agreed laytime. To find out how much extra time was used, subtract the agreed laytime from the total time used:

   Extra time used (demurrage): 15 days – 12 days = 3 days

4. Finally, to calculate the demurrage, multiply the extra time used by the agreed demurrage rate:

   Demurrage: 3 days * $2000/day = $6000

So, in this case, the charterer would have to pay $6000 in demurrage for the extra time used.

 

Reversible Laytime Calculation Example 3

Let’s go through another example of reversible laytime calculation, this time involving saved time, also known as despatch.

Let’s assume:

1. The agreed reversible laytime is 14 days.
2. The loading time actually used is 6 days.
3. The discharging time actually used is 5 days.
4. The despatch rate agreed is $1000 per day.

Here’s how to calculate:

1. Add up the total time used for loading and discharging:

   Loading time: 6 days Discharging time: 5 days Total time used: 6 days + 5 days = 11 days

2. Compare this to the agreed reversible laytime:

   Agreed reversible laytime: 14 days Total time used: 11 days

3. In this example, the charterer has used less time than the agreed laytime. To find out how much time was saved, subtract the total time used from the agreed laytime:

   Saved time (despatch): 14 days – 11 days = 3 days

4. Finally, to calculate the despatch, multiply the saved time by the agreed despatch rate:

   Despatch: 3 days * $1000/day = $3000

So, in this case, the charterer would be entitled to a despatch payment of $3000 for the time saved. However, it should be noted that despatch is not always granted by the shipowner. It will depend on the terms and conditions stated in the charter party agreement.