Ship Operations: Post-Fixture Operations, Voyage Planning, Bunkering, Freight, and Demurrage Explained

Ship Operations

Ship Operations is the practical department that turns a chartering fixture into a completed voyage. Once a ship has been fixed for employment, the commercial agreement must be converted into instructions, port arrangements, voyage monitoring, cost control, document handling, freight or hire collection, bunker planning, and dispute prevention. The Ship Operations Department is therefore the working link between the ship, Shipowner, Ship Manager, Charterer, Shipbroker, Port Agent, cargo interests, technical department, crewing department, finance department, and insurance department.

In dry bulk and tramp shipping, the chartering team may conclude the business, but the Ship Operations Department makes the business work. A fixture only becomes profitable if the ship is properly instructed, the ports are prepared, bunkers are bought intelligently, the Ship Master understands the charter terms, port agents act promptly, Bills of Lading (B/L) are signed correctly, laytime is recorded accurately, freight or hire is collected on time, and avoidable delays are prevented. Poor operations can turn a profitable fixture into a loss-making voyage.

The Ship Operations Department has four (4) principal duties:

To ensure that the Ship Master knows exactly what is expected of the ship and the ship’s command.
To monitor the voyage so that costs are minimized and revenue is protected.
To identify possible obstacles, delays, claims, and disputes early and resolve them before they become serious.
To act as an information centre within the ship management office so that every relevant department understands what the ship is doing and what action is required.

Ship operations is not merely clerical work. It requires commercial judgment, technical awareness, legal understanding, port knowledge, bunker-market awareness, voyage-planning discipline, and constant communication. A good operator understands the Charterparty, the cargo, the ship, the port, the weather, the bunker position, the documentary requirements, and the financial consequences of delay.

Ship Operations Department after the Ship Is Fixed

After the ship has been chartered, the Ship Operations Department should receive the fixture recap and, as soon as available, a copy of the full Charterparty. The operator must examine what has been agreed and identify all points that must be communicated to the Ship Master, Port Agents, technical managers, crewing department, accounting department, and other internal or external parties. Any misunderstanding at this stage can create delay, cargo claims, demurrage disputes, or documentary problems later.

The following details should be passed to the Ship Operations Department by the Shipowner or chartering Shipbrokers without delay:

Cargo size, cargo description, stowage factor, cargo sensitivity, cargo hazards, and any special handling requirements.
Loading port, discharging port, berth or port nomination terms, port restrictions, draft restrictions, air draft restrictions, tidal restrictions, and berth availability information.
NOR (Notice of Readiness) requirements, including when, where, how, and to whom NOR must be tendered.
Any special instructions for the Ship Master concerning cargo, Bills of Lading (B/L), letters of indemnity, mate’s receipts, fumigation, surveys, hold cleanliness, or cargo documentation.

This information must be relayed to the Ship Master promptly and accurately. The Ship Master should not be expected to interpret a short fixture recap without support if the full Charterparty contains important details. The Ship Operations Department should highlight the clauses that directly affect shipboard action, including laycan, NOR, cargo exclusions, loading and discharging rates, safe berth or safe port requirements, Bills of Lading (B/L) instructions, bunker arrangements, and any special rider clauses.

Initial Contact with Port Agents

Once the business is fixed, the Ship Operations Department should contact the loading port agent immediately. In many cases, agents may already have been approached while the ship was still under negotiation, but this is not always possible. Early contact helps identify port problems before the ship arrives and allows the operator to prepare cash, documents, surveys, crew matters, spares, and port instructions.

The loading port agent should be asked to provide:

Pro Forma Disbursement Account (Pro Forma D/A).
Confirmation of any port, berth, draft, tidal, air draft, cargo, crane, working-hours, holiday, customs, or immigration restrictions affecting the ship.
Information on likely berthing prospects, congestion, loading prospects, cargo readiness, terminal working schedule, and expected waiting time.
Any additional information that may affect the voyage, including port health requirements, free pratique practice, pilotage rules, tug requirements, agency formalities, survey requirements, and local documentation procedures.

The agent must also understand who is instructing the agent and whose interests the agent represents. In some trades, the same agent may act for several parties or a Charterer may nominate the agent. The Ship Operations Department should clearly state whether the agent is appointed as Owner’s Agent, Charterer’s Agent, or protecting agent and what authority the agent has.

Internal Coordination within the Ship Management Office

Ship operations cannot be separated from the rest of the ship management office. A ship approaching port may need stores, lubricants, spare parts, crew changes, cash, medical support, repairs, surveys, certificates, mail, technical attendance, class inspection, or P&I assistance. The operator must coordinate these requirements so that they do not delay cargo operations or increase port costs unnecessarily.

The Ship Operations Department should liaise with internal departments to ensure that:

Crew mail, personal effects, and small parcels are forwarded to the ship where appropriate.
Spare parts already ordered and awaiting dispatch are delivered to the correct port in time.
Crew changes are planned well in advance, including visas, flights, immigration rules, medical requirements, and launch arrangements.
Classification surveys, statutory surveys, certificate renewals, and technical attendances are arranged where required and commercially practical.
Stores, provisions, lubricants, chemicals, ropes, safety equipment, and other supplies are delivered on board without disrupting cargo operations.
CTM (Cash to Master) is arranged in advance where required for crew advances, local payments, and shipboard needs.

CTM (Cash to Master) remains an important practical matter. Crew members may need local currency at the port for shore leave or personal expenses, and the Ship Master may need cash for small shipboard payments. However, CTM must be controlled carefully because cash movement creates security, accounting, and compliance risks. The operator should confirm amount, currency, delivery method, receipt procedure, and any local banking restrictions.

Loading Port Operations

When the ship arrives at the loading port, the Ship Operations Department should maintain close contact with the Ship Master and Port Agent. The operator must confirm that the ship has reached the correct place, that NOR (Notice of Readiness) has been tendered correctly, that free pratique and customs formalities are being handled, that cargo is available, and that loading will start as soon as possible.

At the loading port, the Ship Operations Department should ensure that:

NOR (Notice of Readiness) has been tendered in writing and, where relevant, received or acknowledged.
Loading operations are proceeding as quickly as the Charterparty and port circumstances permit.
The Ship Master’s requirements, including spares, stores, CTM, crew needs, surveys, and documents, are met promptly.
A suitable amount has been remitted to the Port Agent to cover disbursements and CTM (Cash to Master).
The Port Agent understands and follows all instructions concerning Bills of Lading (B/L), mate’s receipts, cargo quantity, clausing, letters of indemnity, and release of original documents.

Loading port work is especially important in dry bulk because later disputes often begin with the first port record. Hold inspection, cleanliness certificate, draft survey, commencement of loading, stoppages, rain periods, shifting, trimming, completion of loading, document presentation, and sailing time must be recorded accurately. If the Statement of Facts (SOF) is incomplete, the demurrage or despatch calculation may become difficult or disputed.

After the ship sails from the loading port, the operator should immediately prepare for discharge. All relevant documents, cargo details, Bills of Lading (B/L), manifests, stowage plans, draft survey figures, cargo certificates, and instructions should be reviewed. The discharging port agent should be contacted early so that berthing prospects, discharge method, working hours, customs rules, receiver arrangements, and port restrictions are known before arrival.

Ship Operations under Time Charter

Time Charter operations differ from Voyage Charter operations because the Time Charterer gives employment orders to the ship. The Ship Operations Department must therefore ensure that the Ship Master knows who the Time Charterer is, who is authorized to issue voyage instructions, and whether instructions may come from the Time Charterer’s manager, operator, agent, sub-charterer, or other representative.

The Ship Master must also be informed of the period of the Time Charter, intended trade, delivery place, redelivery range, cargo exclusions, trading limits, war-risk restrictions, sanctions restrictions, and any special clauses. Shipowners often prohibit dangerous cargoes, dirty cargoes, corrosive cargoes, cargoes likely to damage holds, and trading to politically or geographically hostile areas. The Ship Master must know these restrictions so that contrary orders can be questioned immediately.

The most important initial issue under Time Charter is delivery. The Ship Operations Department must confirm the agreed place and arrangements for delivery, including delivery survey, bunker survey, condition survey, delivery notices, delivery time, and the agent acting for the Shipowner. Hire usually begins at delivery, so timing must be recorded precisely. The delivery Statement of Facts, bunker quantities, and ship condition evidence may later affect hire, bunker settlement, off-hire, and redelivery disputes.

Ship Voyage Planning

The Ship Operations Department plans and monitors the movement of the ship from loading port to discharging port and from the discharge port to the next employment. Voyage planning has many components, but two (2) principal operational elements are:

Ship Bunkering
Ship Routing

These two elements are connected. The chosen route affects fuel consumption, voyage duration, weather exposure, port costs, piracy risk, canal dues, emissions profile, and safe arrival. The bunker plan affects cargo intake, draft, voyage safety margin, cash flow, and whether a deviation for bunkering is worthwhile. A ship may save money by buying cheaper bunkers at another port, but the saving can disappear if deviation, delay, pilotage, port dues, launch cost, or lost cargo intake outweigh the price difference.

1- Ship Bunkering

Ship Bunkering is the planning, purchase, supply, measurement, testing, and control of fuel used by the ship. Modern ships may use VLSFO (Very Low Sulfur Fuel Oil), MGO (Marine Gas Oil), HSFO where permitted with approved scrubbers, LNG, methanol, or other fuels depending on ship design and regulatory requirements. In many conventional dry bulk ships, the Main Engine (ME) runs on VLSFO during sea passage, while Auxiliary Engines (AE) may use MGO, especially in port, during maneuvering, or where required by local regulation.

The word bunkers remains from the early steamship era, when coal for the engine was stored in compartments called bunkers. The expression survived the shift from coal to oil and remains standard shipping language. Other old expressions also remain in daily use: ships are still said to be “steaming” at sea and “sailing” from port, even though most modern ships are motor ships.

Bunkering may cause delay and extra port expenses unless it is performed concurrently with loading or discharging. If the ship deviates to a bunker port, the deviation may require additional steaming, pilotage, port dues, anchorage charges, tug assistance, agency fees, and time. If bunkering is by barge, the ship may need to wait for the bunker barge. If bunkering is at a jetty, the ship must berth and moor safely before hoses are connected. After supply, tanks must be sounded or measured, delivery notes must be checked, samples must be taken, and fuel quality must be verified.

Even at an efficient bunker port where pumping is fast, the total bunkering call may consume many hours. Therefore, bunker planning must consider not only price per ton but also total voyage economics. The cheapest bunker price may be commercially unattractive if the bunker call causes significant delay, increases port expenses, or reduces cargo intake.

Ship Bunkering Example

Assume a 40,000 DWT bulk carrier with constants of 350 tonnes and fresh water of 100 tonnes. The ship consumes 24 tonnes of VLSFO per day at sea and 2 tonnes of MGO per day for auxiliary consumption. At the loading port, the ship has 400 tonnes VLSFO and 90 tonnes MGO remaining on board. Reasonable bunkers are available at Loading Port L. At Discharging Port D, bunkers are unavailable at acceptable prices. The next loading port, Port N, is 14 days away from Port D. During the voyage from Port L to Port D, the ship passes Port B, where bunkers are cheaper, but the bunker call creates USD 4,000 in port calling charges and USD 6,000 in delay cost.

Bunker prices are:

At Loading Port L: VLSFO USD 550 per tonne and MGO USD 600 per tonne.
At Bunkering Port B: VLSFO USD 520 per tonne and MGO USD 560 per tonne.

Voyage time is:

Loading operation: 3 days.
Steaming Port L to Port B: 15 days.
Steaming Port B to Port D: 10 days.
Discharging operation at Port D using shore gear: 20 days.
Steaming Port D to Port N: 14 days.

Option 1: Bunkering at Loading Port L

For VLSFO, the ship must cover 39 steaming days from Port L through Port D and onward to Port N. Adding a 6-day safety margin gives 45 days. At 24 tonnes per day, the requirement is 1,080 tonnes. After deducting 400 tonnes already on board, the ship needs 680 tonnes VLSFO.

For MGO, the ship must cover 39 steaming days plus 23 port days, making 62 days. Adding a 6-day safety margin gives 68 days. At 2 tonnes per day, the requirement is 136 tonnes. After deducting 90 tonnes already on board, the ship needs 46 tonnes MGO.

The cost at Port L is:

680 tonnes VLSFO x USD 550 = USD 374,000.
46 tonnes MGO x USD 600 = USD 27,600.
Total bunker cost = USD 401,600.

The cargo intake calculation after bunkering at Port L is:

Ship deadweight: 40,000 tonnes.
Less constants: 350 tonnes.
Less fresh water: 100 tonnes.
Less VLSFO: 1,080 tonnes.
Less MGO: 136 tonnes.
DWCC available: 38,334 tonnes.

Option 2: Bunkering at Port B

If the ship proceeds first to Port B, she uses bunkers during the 15-day passage from Port L to Port B. VLSFO consumption is 15 days x 24 tonnes per day = 360 tonnes. From the initial 400 tonnes, the ship arrives at Port B with 40 tonnes VLSFO remaining.

MGO consumption to Port B is assumed at 18 days x 2 tonnes per day = 36 tonnes, allowing for the loading period and passage. From the initial 90 tonnes, the ship arrives at Port B with 54 tonnes MGO remaining. These remaining quantities must be sufficient to provide an adequate safety margin up to Port B.

To complete the voyage from Port B to Port D and then to Port N, the ship needs VLSFO for 24 steaming days plus a 3-day safety margin, making 27 days. At 24 tonnes per day, this equals 648 tonnes. After deducting 40 tonnes remaining on board, the ship needs 608 tonnes VLSFO.

For MGO, the ship needs 24 steaming days plus 20 port days, making 44 days. Adding a 3-day safety margin gives 47 days. At 2 tonnes per day, this equals 94 tonnes. After deducting 54 tonnes remaining on board, the ship needs 40 tonnes MGO.

The cost at Port B is:

608 tonnes VLSFO x USD 520 = USD 316,160.
40 tonnes MGO x USD 560 = USD 22,400.
Sub-total = USD 338,560.
Calling charges = USD 4,000.
Delay cost = USD 6,000.
Total cost = USD 348,560.

The cargo intake calculation after bunkering at Port B is:

Ship deadweight: 40,000 tonnes.
Less constants: 350 tonnes.
Less fresh water: 100 tonnes.
Less VLSFO: 608 tonnes.
Less MGO: 40 tonnes.
DWCC available: 38,902 tonnes.

The comparison shows that bunkering at Port B saves USD 53,040 in bunker-related costs and increases DWCC by 568 tonnes because the ship does not sail from Port L with the full bunker quantity on board. This example demonstrates why bunker planning must include fuel price, port cost, delay cost, safety margin, and cargo intake. A cheaper bunker port may improve the voyage result, but only if the complete calculation supports it.

These calculations may appear laborious, but they are often the only reliable way to identify the best bunker policy. In many voyages, such analysis may not be useful because no major bunker port lies near the route, or the deviation would be too long. However, where the ship passes major bunker ports such as Rotterdam, Las Palmas, Cape Town, Jeddah, Singapore, New Orleans, or Los Angeles, a proper bunker comparison can materially improve voyage earnings.

Bunker Market Control

The bunker market is volatile because prices, availability, and quality change continuously. The Ship Operations Department must monitor three (3) main factors:

Bunker Cost
Bunker Availability
Bunker Quality

A- Bunker Cost: Bunker prices change daily and vary between ports and suppliers. The Ship Operations Department must obtain reliable quotations from major suppliers, traders, and brokers. Large oil companies do not always offer the lowest prices. Smaller independent suppliers may be competitive, but credit, quality, delivery reliability, and financial reputation must be checked. Ship Managers that buy large quantities regularly may negotiate directly. Others may use specialist bunker brokers to obtain market coverage and competitive pricing.

B- Bunker Availability: A low quoted price is not useful if supply is delayed or unavailable. Bunker delays may arise from heavy demand, barge shortages, refinery problems, port congestion, shortage of product, local weather, or supplier failure. A delay at the bunker port can make an apparently cheap supply uneconomic. Operators must confirm delivery window, barge availability, pumping rate, anchorage restrictions, and whether bunkering can be performed simultaneously with cargo operations.

C- Bunker Quality: Bunker quality is as important as price. Poor fuel can increase consumption, damage fuel pumps, clog filters, harm the main engine, cause loss of power, create off-hire disputes, or expose the ship to safety risk. Fuel specifications must be agreed clearly, samples must be taken properly, and independent testing should be arranged where appropriate. Services such as FOSBAS (Fuel Oil Bunker Analysis and Advisory Service) and VFQT (Veritas Fuel Quality Testing) are used to check bunker quality and warn against unsafe fuel.

Bunker quality is especially critical under Time Charter because the Time Charterer usually supplies and pays for bunkers. The Shipowner may lose direct commercial control over the fuel purchase, yet poor fuel can damage engines owned and maintained by the Shipowner. Therefore, the Ship Operations Department and technical department must ensure that the Charterparty contains adequate bunker-quality clauses and that the ship’s engineers are alert during sampling, receipt, and fuel changeover.

2- Ship Routing

Ship Routing is the planning and adjustment of the ship’s sea passage to achieve a safe, efficient, and commercially sound voyage. The shortest geographical route is not always the best route. Ships travel on the surface of the globe, and great-circle routes, currents, tides, seasonal weather, restricted areas, piracy zones, canal options, war risk areas, emission-control requirements, and port arrival windows all affect the choice of route.

On a Mercator chart, a great-circle route appears as a curve, although it may represent the shortest practical ocean route between two distant points. The Ship Master and operator must also consider tides and currents. A favourable current can improve performance, while an adverse current may reduce speed for several days and increase fuel consumption. Sometimes a route that appears longer in miles may be faster and safer because it avoids strong adverse currents or severe weather.

Weather is one of the most important routing factors. A severe storm can force a ship to slow down, heave to, alter course, or make little progress. Heavy weather may also damage hatch covers, cargo, deck equipment, cranes, vents, lifeboats, or hull structure. In dry bulk trades, cargo safety is critical because certain cargoes may shift, liquefy, heat, or suffer water damage if the ship is exposed to severe conditions.

Weather Routing Services support Ship Masters and operators by providing recommended routes based on meteorology, navigation, satellite observations, ship reports, ocean currents, and voyage objectives. The Ship Master provides the planned voyage, ship particulars, loading condition, speed, and operational limits. The Weather Routing Service then recommends a route and updates advice as the voyage proceeds. The Ship Master reports position and weather during the voyage, allowing the advice to be refined.

A Weather Routing Service may recommend a longer route in miles if it reduces total voyage time, fuel consumption, heavy-weather exposure, or risk of damage. Weather routing is especially important in Time Charter because Charterers often require independent evidence in speed and consumption disputes. Weather-routing reports can help establish whether the ship followed an expeditious route and whether weather conditions were within or outside good-weather warranty terms.

Operators should also understand basic climatology. Ice can close the Great Lakes, the St. Lawrence Seaway, Baltic ports, Alaskan ports, and other high-latitude areas for part of the year. Hudson Bay may be closed longer than it is open. North Atlantic winter weather can cause severe delay and hull stress. Monsoon seasons around the Indian subcontinent can interrupt port operations. Hurricanes in the Caribbean, typhoons in the Far East, cyclones in the Indian Ocean, and willy-willies off Western Australia must all be considered in voyage planning.

Legal arguments about whether a ship is on-hire or off-hire while trapped by ice or weather may be commercially useless if the Charterer becomes insolvent or cargo interests suffer major disruption. Good operations aims to prevent exposure before it becomes a dispute.

Ship Hire and Freight

The Ship Operations Department must ensure that hire and freight are collected in accordance with the Charterparty and that receipts, invoices, statements, and deductions are handled accurately. Operations and accounting must work closely because a missed payment deadline, incorrect invoice, unchallenged deduction, or late demurrage claim can cause substantial loss.

Ship Hire

Ship Hire is the income derived from a Time Charterer. It is usually paid every 15 days or monthly in advance. Time Charterers may make deductions only if permitted by the Charterparty or recognized by law. Common deductions include brokerage commission, address commission where agreed, off-hire time, advances made by Charterers on behalf of Shipowners, and port expenses that are for the Shipowner’s account but paid by the Charterer.

At delivery, the Time Charterer commonly pays for bunkers remaining on board (ROB) at the agreed delivery price. At redelivery, the Charterer is credited or charged for bunkers remaining on board at the agreed redelivery price. The Ship Operations Department must arrange a bunker survey at both delivery and redelivery. The Bunker Surveyor should be agreed by both parties where possible. If not, each side may appoint its own surveyor, and the surveyors must reconcile quantity and quality.

Delivery and redelivery condition are also important. The ship should be redelivered in the same good order and condition as at delivery, fair wear and tear excepted. Areas under Charterer control, such as holds, hatch covers, cranes, grabs, deck fittings, and cargo spaces, should be inspected carefully. Damage by grabs is particularly important in dry bulk operations. After redelivery, final accounts should be prepared and any balance due to the Shipowner should be pursued promptly.

Time Charterer vetting is a major operational and commercial issue. A Charterer may offer attractive hire, pay early instalments promptly, load cargo under Freight Prepaid Bills of Lading, collect freight, and then disappear or default. The Shipowner may still be obliged to carry and deliver cargo to innocent Bill of Lading holders. Shipowner protection depends on careful Charterer vetting, credit control, payment monitoring, lien rights, documentary control, and experienced Shipbrokers.

Freight

Freight is income from a Voyage Charter or liner service. Freight is paid for carrying a quantity of cargo from one port to another. This differs from Time Charter hire, which is payment for use of the entire ship over time. In tramp shipping, freight is often expressed in dollars per ton of actual cargo carried. In some trades, a Lump Sum Freight is agreed, allowing the Charterer to load within the ship’s cargo capacity and contractual limits for a fixed amount.

Liner freight is more complex because a liner ship may carry hundreds or thousands of separate consignments. Container freight may involve container rates, surcharges, service contracts, inland haulage, terminal handling charges, reefer charges, dangerous goods charges, and door-to-door obligations. Liner operators usually have specialist departments dealing with freight rating, documentation, collection, and tariff management.

In tramp shipping, the Ship Operations Department plays a central role in checking when freight becomes payable and ensuring the Charterer complies. Common freight-payment structures include:

Freight fully prepaid on or within a stated number of days after signing Bills of Lading (B/L).
Freight proportionally prepaid, often 90% or 95%, within a stated number of days after signing Bills of Lading (B/L).
Freight paid BBB (Before Breaking Bulk), meaning before commencement of discharge.
Freight paid on right and true delivery.

Any balance may be settled together with demurrage or despatch. If the Charterer fails to load the agreed full cargo, Deadfreight arises. Deadfreight is calculated as freight on the missing cargo quantity less any expenses saved by not carrying that quantity, such as stevedoring or cargo-based port costs where applicable.

Calculating Demurrage and Despatch

In Voyage Charters, the Charterer is allowed a specific time, known as laytime, to complete loading and discharging. Laytime may be expressed as a fixed number of days, a total number of hours, or a cargo-handling rate such as so many tonnes per day. If cargo operations exceed the agreed laytime, the Shipowner earns demurrage at the agreed daily rate. If cargo operations finish sooner than the allowed time, many dry cargo Charterparties require the Shipowner to pay despatch to the Charterer.

Demurrage is liquidated damages for detention of the ship beyond the agreed laytime. Shipowners usually seek a demurrage rate above the ship’s daily running cost because delay deprives the ship of further earning opportunity. Despatch is usually half the demurrage rate, but this is not automatic. It must be stated in the Charterparty. Despatch is rare in tanker Charterparties.

Laytime disputes often begin at arrival. The first question is whether the ship is an Arrived Ship. The second is whether NOR (Notice of Readiness) was validly tendered. The third is whether the ship was actually ready. The fourth is which periods count and which periods are excepted. Weather, holidays, strikes, berth congestion, machinery breakdown, shifting, port orders, and partial stoppages may all affect the final calculation.

The loading and discharging Port Agents must be given clear instructions about tendering NOR. They should inform the Ship Operations Department immediately after NOR has been tendered and should provide proof of tender, time, method, recipient, and any response. NOR must always be in writing unless the Charterparty clearly permits another method. If there is doubt about validity, the safest practice is to tender NOR and, if necessary, retender without prejudice to earlier notices.

The Ship Master and Ship Agent should never delay tendering NOR merely because validity may be disputed. If NOR is tendered and later found too early, the legal argument may still be preserved through later notices. If NOR is not tendered at all, the lost time may be impossible to recover. NOR is the point at which the laytime meter begins to move after any applicable notice period.

What is Turn Time (TT)?

Turn Time (TT) is the period after NOR is tendered before laytime begins. It originated when Charterers first learned of a ship’s arrival through visual signals and needed time to arrange berth, labour, cargo, and equipment. Modern communications allow arrival to be predicted precisely, but traditional turn-time clauses remain common.

Turn Time may be six hours, twelve hours, twenty-four hours, or another agreed period. Some clauses state that if cargo operations begin earlier, time actually used counts immediately. Others delay time counting until the turn-time period expires regardless of early work. The operator must read the Charterparty carefully before preparing the laytime statement.

What are SHEX and SHINC?

SHEX (Sundays and Holidays Excepted) means Sundays and holidays are excluded from laytime unless the Charterparty provides that time used counts. SHINC (Sundays and Holidays Included) means Sundays and holidays count as laytime. Ultra-modern bulk terminals that work continuously often use SHINC. Traditional ports, or ports with limited weekend work, may use SHEX.

SHEX may be modified by UU (Unless Used). In Muslim countries, Friday may also be treated as an excluded or included day, producing terms such as FHEX (Fridays and Holidays Excepted) or FHINC (Fridays and Holidays Included). These expressions must be understood before the Timesheet is prepared. A wrong assumption about holidays or working days can materially change demurrage or despatch.

Charterparties may also contain arrival and readiness expressions such as:

WIPON (Whether In Port or Not)
WIBON (Whether in Berth or Not)
WIFPON (Whether in Free Pratique or Not)

These terms are intended to reduce disputes about where and when NOR may be tendered, but their effect depends on exact wording and the cause of delay. Operators should not assume that abbreviations solve every problem. They must be read with the arrival clause, port or berth clause, free pratique clause, and laytime clause.

Free Pratique and Port Health

Free Pratique is port health clearance. Historically, ships arriving from overseas could spread serious disease, so a ship might be required to fly a yellow flag until health authorities boarded and granted a clean bill of health. In many modern ports, free pratique may be granted by radio or electronic declaration if no illness is reported and the ship has not arrived from a high-risk area. However, practice differs by port, and the Port Agent’s advice remains important.

If free pratique is required before NOR, failure to obtain it can delay laytime. If the Charterparty contains WIFPON wording, NOR may be permitted before free pratique in some circumstances. The Statement of Facts (SOF) should record when free pratique was requested, granted, and whether it affected cargo operations.

Statement of Facts (SOF) and Time Sheet

The Port Agent should prepare a Statement of Facts (SOF) recording every important event at the port. The SOF should include arrival time, anchoring time, berthing time, NOR tender, NOR acceptance or rejection, free pratique, customs clearance, commencement of loading or discharge, stoppages, weather, holidays, breakdowns, strikes, draft surveys, completion, documents on board, and sailing time.

The Ship Master should record similar details in the ship’s logbook so that the SOF can be checked. Ideally, the SOF should be countersigned by the Ship Master and terminal representative. Even where terminal signature is not obtained, the SOF remains the key factual document from which the Ship Manager prepares the Timesheet.

The Timesheet applies the Charterparty to the SOF. It shows time allowed, time used, time excepted, when laytime expired, demurrage earned, or despatch payable. A running total of laytime used should be maintained because once allowed laytime is exhausted and the ship goes on demurrage, the calculation method changes. The expression Once on Demurrage, Always on Demurrage means that ordinary laytime exceptions no longer apply after demurrage begins unless the Charterparty clearly states otherwise.

Despatch calculation depends on the wording. If despatch is payable on laytime saved or working time saved, the same excluded periods used in laytime calculation are considered when calculating saved time. If despatch is payable on all time saved, every calendar hour from completion until the time laytime would have expired counts, including weekends and holidays.

Shipbrokers' Commissions

Chartering Shipbrokers are remunerated by commission or brokerage. A common rate is 1.25% for each Shipbroker, but the actual rate depends on the fixture. There may be one broker, two brokers, or a chain of brokers where the business originates far from the Shipowner’s location. The Charterparty should identify the brokers and the commission payable.

In a Time Charter, brokerage is usually payable on total hire paid. In a Voyage Charter, brokerage is usually payable on gross freight, and the clause may also provide commission on deadfreight and demurrage. Shipbrokers’ commissions are normally not payable on despatch because despatch is paid by the Shipowner to the Charterer, not income earned from the Charterer.

Address Commission (ADDCOM)

Address Commission (ADDCOM) is a deduction commonly allowed to the Charterer, often at a rate such as 3.75%, although the exact rate is negotiated. Address Commission is paid to the Charterer rather than a Shipbroker. Its origin is historical and sometimes unclear, but it may function as compensation for the Charterer’s internal chartering department or as a method of allocating income within a trading group.

Because Address Commission directly reduces the Shipowner’s net income, it must be included in voyage estimation and hire or freight calculations. Operators must ensure that Address Commission is deducted only where agreed and at the correct rate.

In Lieu of Weighing (ILOW)

In Lieu of Weighing (ILOW) is a deduction, often around 1%, made because the Charterer agrees to pay freight on the Bill of Lading (B/L) quantity less the deduction instead of weighing the cargo at discharge and paying on outturn weight. Although the original commercial logic may be historical, ILOW remains part of some dry bulk trades.

The operator should check whether ILOW is expressly agreed, how it applies, and whether it affects freight, deadfreight, commission, or final settlement. It should not be deducted unless the Charterparty permits it.

Operational Communication between Shipbrokers and Ship Managers

Close liaison between Chartering Shipbrokers and Ship Managers is essential. Shipbrokers know what was negotiated and why certain clauses were agreed. Ship Managers and operators know the ship’s practical condition, port requirements, costs, and voyage risks. If the two sides fail to communicate, the fixture may contain assumptions that cannot be performed efficiently.

In an in-house ship-management structure, the chartering desk and operations desk may sit within the same organization, but the need for clear communication remains. The operator should not discover important charter terms only after a dispute arises. Equally, the Shipbroker should not negotiate clauses without knowing whether the ship can safely and commercially perform them.

Conclusion

Ship Operations is the department that protects the voyage after the fixture is concluded. The operator ensures that the Ship Master is properly instructed, Port Agents are appointed and controlled, port costs are monitored, bunkers are planned, routes are assessed, cargo operations are followed, documents are checked, hire and freight are collected, and laytime records are preserved.

A successful operation depends on early preparation and continuous attention. Bunkering decisions affect both cost and cargo intake. Routing decisions affect fuel, time, safety, and weather exposure. NOR and SOF records affect demurrage and despatch. Hire and freight collection affect cash flow. Port-agent instructions affect Bills of Lading (B/L), cargo claims, and legal exposure. Each operational detail has financial consequences.

For Shipowners, Ship Managers, Charterers, Shipbrokers, Port Agents, and Ship Masters, professional ship operations means anticipating problems before they become claims. A well-operated voyage is not only a ship moving from one port to another; it is a coordinated commercial process in which contract terms, technical realities, port conditions, bunker economics, weather, documents, and money must all be managed with precision.