Working Days in Charterparty

Working Days in Charterparty

The meaning of the word day may be interpreted as days upon which it is customary to work. However, lay time may be expressed in terms of a number of Working Days (WD).

In shipping business, during charterparty negotiations, prudent shipbrokers do not leave such things to chance and include a reference to working days in charterparty clauses.

Working Day expression makes it clear that customary rest days and holidays do not count as lay time. For example, working day expression exclude Fridays in Islamic countries. The expression working day is a description of the type of day. Working day expression is intended to draw a distinction between those days upon which work is habitually carried out at the port in question and those days which are considered to be days of rest or holidays.

Working Days is a day of 24 Consecutive Hours. Working day expression does not take into account the number of hours which are customarily worked at that port in any working day. Therefore, Working Day (WD) expression would not be open to the charterer to construe a clause in such a way that Working Day (WD) meant a period of 24 hours consisting of two calendar days during which at the relevant port it was customary to work for 12 hours a day.

In theory, Working Day (WD) is a period of 24 Hours which starts at midnight on one day and finishes at midnight on the following day i.e. a Working Calendar Day.

Mere reference to days will be calendar days unless there is something which makes it clear that the intention was that it should be any period of 24 hours. In circumstances where working days do not commence at midnight, it is likely that before the expiry of a working day consisting of a period of 24 hours, a non-working day such as a holiday or a Sunday may begin. If that occurs, the working day will then effectively be in two (2) parts:

  • First part being from the commencement of lay time to midnight on that day
  • Second part being at midnight at the end of the holiday until the expiry of the 24 hours

For example, if charterparty laytime provision is for working days and Sunday is excluded (a non-working day in port). When laytime commences at noon on Saturday, the first day of allowed laytime will run for 12 hours until midnight on the Saturday. Laytime will be interrupted for during Sunday i.e. 24 hours. Laytime will resume for a further 12 hours ending at noon on Monday.

Working Days in Ship Chartering

A working day refers to any day or part of a day that isn’t specifically excluded from laytime by the charterparty and isn’t a holiday.

According to the “BIMCO Charterparty Laytime Definitions” working days are defined as days or parts of days not explicitly excluded from laytime in the charterparty and not considered holidays. This definition might seem to allow charterers significant leeway in determining how many hours count as laytime in a single calendar day. For instance, if a port typically operates for eight hours per calendar day, it would take three calendar days to accumulate 24 hours of laytime, equating to one “day.” However, the term “working” more accurately refers to time not designated for rest (like Sundays or Fridays in Islamic countries) or holidays, encompassing a 24-hour period from midnight to midnight. In the 1900 Saxon v. Union case, the English House of Lords clarified that a working day is distinguished from a holiday, including Sundays and traditional rest days like Christmas and Good Friday.

“Working” is thus a term describing the nature of the day. The Reardon Smith Line v. Ministry of Agriculture case in 1963 further explained in the House of Lords that “working” describes a day type. Typically, a calendar day is 24 hours, starting and ending at midnight, unless the charterparty indicates otherwise. This understanding is why the term prima facie was used in the statement.

Post the 1963 decision, if charterers calculate laytime based on an eight-hour working day as per the port’s custom, this would be considered incorrect.


BIMCO Laytime Definitions for Charter Parties

The Laytime Definitions for Charter Parties were created to offer clear interpretations of frequently used terms and phrases for industry professionals. The aim is to minimize disagreements regarding the intentions of parties in a market where agreements are typically finalized using a recap message and noted amendments, often without the need for exchanging or returning draft contracts. These guidelines are designed for inclusion in charter parties. The most recent version is the Laytime Definitions for Charter Parties 2013.

We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to learn more about Laytime Definitions for Charter Parties and to obtain the original Charter Party forms and documents.  

The BIMCO Laytime Definitions for Charter Parties are a standardized set of definitions developed by the Baltic and International Maritime Council (BIMCO). These definitions are intended to provide clarity and uniformity in the interpretation of terms related to laytime in charter party agreements. Laytime refers to the time allocated for loading and unloading cargo, and these definitions help in reducing misunderstandings and disputes in maritime contracts by clearly outlining the meanings of commonly used words and phrases within the industry. This initiative by BIMCO is part of their ongoing efforts to standardize and simplify maritime contractual processes.


What is a Working Day in Ship Chartering?

In the context of ship chartering, a “Working Day” is a specific term that refers to the days when cargo operations (loading or unloading) can legally and practically be carried out under the terms of a charter party agreement. This term is crucial for determining laytime, which is the time agreed upon between the shipowner and the charterer for loading and unloading cargo.

Key characteristics of a Working Day in ship chartering include:

  1. Exclusions: A Working Day typically excludes weekends, holidays, and other non-working days as specified in the charter party. The exact definition can vary based on the agreement and local practices.
  2. Part of Day Counts: If a part of the day qualifies as a Working Day (not affected by holidays or other exclusions), it is often counted as a full Working Day in calculating laytime.
  3. Weather Working Day: Sometimes, the term is further qualified as a “Weather Working Day,” meaning operations can only be carried out if weather conditions permit.
  4. Variations by Region and Contract: The specific definition of a Working Day can vary depending on the region, local customs, and the specific terms of the charter party.
  5. Legal and Practical Capability: The day must not only be legally considered as a working day but also practically suitable for carrying out cargo operations.

Understanding the definition of a Working Day in a given charter party is vital as it directly impacts the calculation of demurrage or despatch – fees paid for delays beyond laytime or rewards for efficient operations within laytime, respectively.

Business Day Vs Working Day

When a contract does not explicitly define “business day,” its meaning is often derived from relevant statutory definitions, provided these definitions are either explicitly or implicitly incorporated into the contract.

Various laws provide definitions of “business day.” For example, the Acts Interpretation Act 1954 (Qld) in section 36 broadly defines it as a day that isn’t a weekend or a public, special, or bank holiday where the action related to the contract is to occur. Similarly, the Corporations Act 2001(Cth) in section 9 describes it as a day excluding Saturdays, Sundays, and public or bank holidays in the relevant location.

These statutory definitions, while generally alike, have subtle differences. Depending on which statutory definition is applied, the fulfillment of contractual duties might be affected, potentially leading to debates over the appropriate definition.

Regarding contractual definitions of business days, parties are free to choose their definition, independent of statutory ones. However, clarity and precision in their chosen definition are crucial, especially considering the role of business days in the contract, like in setting deadlines for notices or payments.

Typically, “business day” definitions exclude certain days like weekends and public holidays, and sometimes bank holidays, though the latter can cause confusion as they’re not always public holidays. Another common aspect is tying the definition to a specific location, which can pose challenges in multi-jurisdictional contracts. For example, a public holiday in one jurisdiction might not relieve a party of their obligations if the business day is defined according to another jurisdiction.

The significance of precisely defining “business day” becomes particularly crucial when time-sensitive obligations are involved in a contract.

However, what qualifies as a business day can change over time. The High Court’s ruling in IOC Australia Pty Ltd v Mobil Oil Australia Ltd (1975) illustrates this. In this case, a day initially not a public holiday was later declared as such, impacting the due date for a payment scheduled for the “last business day” of the month. The Court determined that the concept of a business day could adapt to new public holidays, thus shifting the payment due date.

In the shipping industry, a “business day” is defined as a standard working day, excluding weekends and holidays. However, the specific days considered as business days can vary by region. For example, in North America, business days are generally Monday through Friday, whereas in the Middle East, they are often Sunday through Thursday. It’s important to clarify this in specific contexts.

For instance, if a shipping term states “5 business days” beginning on June 16, the delivery would be scheduled for June 22, taking into account the exclusion of the weekend.

In the aviation sector, understanding business days is crucial for coordinating the arrival of parts with field service schedules. Miscounting business days and including weekends could lead to a field representative arriving too early, resulting in unnecessary expenses for extra days of highly skilled technical services.

Shipping companies typically operate and have more control over products during regular business hours. If a shipment needs to be expedited over weekends or holidays, it usually incurs additional premium charges.


Working Day Vs Weather Working Day in Ship Chartering

In ship chartering, the terms “Working Day” and “Weather Working Day” have distinct meanings, each with significant implications for the charter party agreement, particularly concerning laytime calculations.

  1. Working Day:
    • A Working Day refers to a day on which cargo operations (loading or unloading) are typically carried out under the charter party agreement.
    • It usually excludes weekends and public holidays unless otherwise specified in the contract.
    • The definition can be influenced by local practices and specific terms agreed upon in the charter.
    • The term is primarily concerned with whether the day is legally and contractually recognized as suitable for cargo operations, regardless of weather conditions.
  2. Weather Working Day:
    • A Weather Working Day specifically accounts for the impact of weather conditions on cargo operations.
    • This term indicates that the day is only considered a working day if the weather conditions allow for the safe and practical execution of cargo handling activities.
    • If the weather is unsuitable for operations (e.g., due to rain, fog, high winds), even if the day is a regular Working Day, it will not count as a Weather Working Day.
    • This is particularly important in charter agreements where weather can significantly impact the ability to load or unload cargo.

Understanding the difference between these two terms is crucial for both shipowners and charterers. It affects how laytime is calculated – the allotted time for loading and unloading cargo. In contracts with a Weather Working Day clause, laytime is only used up on days when weather conditions permit cargo operations, potentially extending the time for cargo handling without incurring demurrage (penalty for delay). Conversely, under a regular Working Day definition, laytime counts down regardless of weather conditions, unless the contract specifically states otherwise.


What is Weather Working Days (WWD) in Ship Chartering?

In ship chartering, “Weather Working Days” refers to the days on which cargo operations, like loading and unloading, can be performed, subject to weather conditions being favorable. This term is crucial in the context of laytime, which is the time allocated for such operations in a charter party agreement. Here’s a breakdown of what Weather Working Days entail:

  1. Weather-Dependent Operations: The operations can only be carried out if the weather conditions are suitable. This means that if the weather is bad enough to hinder or stop cargo handling activities (like heavy rain, storms, or extreme winds), the day does not count as a Weather Working Day.
  2. Impact on Laytime Calculation: In charter party agreements that use Weather Working Days as a basis for laytime, the laytime only counts on days with appropriate weather. This can extend the period for loading or unloading without incurring demurrage (charges for delays) because adverse weather days are excluded from the laytime calculation.
  3. Variation in Definitions: The specific definition of what constitutes acceptable weather conditions can vary based on the agreement between the shipowner and the charterer, and sometimes depending on the nature of the cargo and the equipment used for loading or unloading.
  4. Risk Allocation: Including Weather Working Days in a charter party is a way of allocating the risk of weather-related delays. It’s an important consideration in regions or seasons where adverse weather is common, as it affects who bears the responsibility for delays caused by weather.

Weather Working Days (WWD) in ship chartering are a contractual mechanism to ensure that laytime is only used on days when weather conditions permit safe and effective cargo operations, thus protecting parties from unanticipated delays due to weather.