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Laytime

Laytime is the time agreed under a voyage charter party for the loading or discharging of cargo without additional payment to the shipowner. The laytime calculation determines whether the charterer is entitled to despatch (a refund payment for completing operations early) or owes demurrage (a penalty payment for exceeding the agreed time). Laytime is the principal commercial and legal accounting of every voyage charter, with significant financial consequences: for a Capesize bulker on a typical iron-ore voyage, a single day of demurrage at USD 25,000 to USD 50,000/day can exceed the daily freight earned. Laytime is governed by the charter party terms (the Notice of Readiness (NOR) triggering the start of laytime, the time exclusions such as SHEX (Sundays and holidays excepted) and SHINC (Sundays and holidays included), the weather working day (WWD) definition, the time bar for demurrage claims, the reversible vs non-reversible treatment between loading and discharging, the all-purposes vs separate counting), and standardised by the BIMCO Laytime Definitions for Charterparties (LAYTIMEDEFS) 2013 (a glossary of terms widely incorporated into modern charter parties). Laytime calculation is performed against the Statement of Facts (SOF) maintained at each port: a chronological log of port events (NOR tendered, NOR accepted, berth allocated, loading commenced, loading interrupted by rain, loading completed) that constitutes the evidential record of operations. ShipCalculators.com hosts the principal computational tools: the laytime calculator, the demurrage calculator, the despatch calculator, the WWD weather working day calculator, the SHEX/SHINC time exclusion calculator, the reversible laytime calculator and the Statement of Facts builder. A full listing is available in the calculator catalogue.

Contents

Background

The economic basis

Voyage charter freight rates compensate the shipowner for the use of the vessel from loading port to discharging port plus a normal operational margin. The rate assumes a normal turnaround at each port. If the charterer takes longer than agreed to load or discharge the cargo, the vessel is held idle at the charterer’s request beyond the assumption built into the freight; the shipowner is entitled to demurrage (additional compensation for the lost earning capacity). Conversely, if the charterer completes operations faster than agreed, the shipowner has earned the freight without using all the assumed time; the charterer is entitled to despatch (a refund of the unused time, conventionally at half the demurrage rate).

The agreed time is laytime. Properly calculated laytime is the foundation of voyage charter economics.

Charter party context

Laytime applies under voyage charter parties (where the charterer hires the vessel for a specific voyage, typically per-tonne freight). It does NOT apply under:

  • Time charter parties: the charterer pays a daily hire that covers all time; demurrage/despatch concepts are inapplicable.
  • Bareboat charter parties: the charterer takes operational control of the vessel and bears all time-related costs.
  • Contracts of affreightment (COA): typically a series of voyage charters; laytime applies per voyage.

Standard voyage charter forms include:

  • GENCON 2022 (BIMCO general dry cargo form, the dominant standard).
  • NYPE-92 vc / NYPE 2015 vc (some voyage applications).
  • Asbatankvoy (the principal tanker voyage charter form).
  • Shellvoy 6 (Shell’s tanker voyage form).
  • BPVOY 5 (BP’s tanker voyage form).
  • Synacomex (BIMCO grain voyage form).
  • Sugarvoy (BIMCO sugar voyage form).
  • Coal-Oreorder (BIMCO coal/ore voyage form).
  • Norgrain (Norwegian grain voyage form).
  • GAFTA / FOSFA forms (commodity-specific).

Each form specifies the laytime mechanism, but most converge on the same basic structure with variations in defined terms and time exclusions.

Notice of Readiness (NOR)

Definition

The Notice of Readiness is the formal document issued by the master to the charterer (or their agent) declaring that the vessel has arrived at the load or discharge port and is ready in all respects to load or discharge. The NOR is the trigger event that starts laytime running (subject to any agreed grace period).

Tendering NOR

NOR must satisfy specific conditions to be valid:

  • Arrival at the agreed port or berth: the vessel must be at or have arrived within the contractually-defined arrival point. For port charters (the vessel is chartered to the port), arrival within the port limits is sufficient. For berth charters (the vessel is chartered to a specific berth), arrival at the berth is required; “WIBON” (whether in berth or not) clauses allow NOR from the port limits if the berth is not available.
  • Physical readiness: the vessel’s holds, hatches, gear and equipment must be ready for loading/discharging.
  • Documentary readiness: any required certificates, paperwork, customs clearance must be in place.
  • Tendered through the prescribed channel: the charter party specifies how NOR must be communicated (telex, email, agent, etc.) and during what hours (typically office hours of the port agent).

If NOR is invalid (e.g. tendered before arrival, or the vessel is not actually ready), it does not start laytime; the master must re-tender a corrected NOR after rectifying the deficiency.

Notice of Readiness clauses

Modern charter parties include detailed NOR provisions covering:

  • Office hours: when NOR is deemed delivered (typically 0900-1700 weekdays).
  • Out-of-hours treatment: NOR tendered at 1830 may be deemed delivered at 0900 the next working day.
  • Anti-circumvention clauses: preventing the master from tendering invalid NOR to start laytime prematurely.
  • Re-tendering provisions: when and how a defective NOR can be remedied.

Laytime time exclusions

SHEX (Sundays and holidays excepted)

Under SHEX clauses, time spent during Sundays and statutory holidays does not count against laytime. This is the most common provision for dry cargo charters; it reflects the fact that ports historically did not operate (or operated at reduced capacity) on Sundays and holidays, so the shipowner should not be entitled to demurrage during those periods.

The specific holidays that count depend on:

  • Port holidays (statutory holidays in the port country).
  • Religious holidays (Friday in some Muslim countries, Saturday in some Jewish areas).
  • Local custom.

The charter party typically specifies which holidays count.

SHINC (Sundays and holidays included)

Under SHINC clauses, time does count even on Sundays and holidays. This is more common for tanker charters and for certain bulk grades where 24/7 operations are the norm. The shipowner has a stronger demurrage position under SHINC.

Weather Working Day (WWD)

A Weather Working Day is a working day during which weather conditions permit cargo operations. Time during which weather suspends operations does not count against laytime under WWD clauses. The principal weather conditions that suspend operations:

  • Heavy rain (for grain, fertiliser, sugar, and other moisture-sensitive cargoes).
  • High winds (for crane operations, particularly with light deck cargo).
  • Lightning (typically suspends operations on tankers and gas carriers due to fire/explosion risk).
  • Heavy seas (preventing barge operations or vessel manoeuvring).

The WWD definition is contractually critical because the determination of “weather working” or “weather not working” can be subjective. Modern charter parties typically include explicit definitions or refer to BIMCO LAYTIMEDEFS 2013.

Common combined terms

The exclusions are commonly combined:

  • WWDSHEX: weather working days, Sundays and holidays excepted (the most common dry cargo combination).
  • WWDSHINC: weather working days, Sundays and holidays included.
  • Running days: 24-hour days, no exclusions (rare; very pro-shipowner).
  • Consecutive days: similar to running days.

Allowed laytime

Quantum

The allowed laytime is specified in the charter party as either:

  • Fixed days (e.g. “5 weather working days”).
  • Per-tonne rate (e.g. “loading rate 12,000 t/day WWDSHEX of 24 consecutive hours”).
  • Per-vessel rate (e.g. “loading at the rate of 1,500 t per hatch per day”).
  • Custom of the port (the average loading/discharging rate at the port).
  • As per FAC (Fast As Can) (the vessel works as fast as the cargo flow permits).

For a per-tonne rate, the allowed laytime equals the cargo quantity divided by the rate. For example, a 50,000 t cargo at 10,000 t/day = 5 days allowed laytime.

Reversible vs non-reversible

If the charter covers both loading and discharging, the charter party specifies how the two are aggregated:

  • Non-reversible (separate counting): laytime allowed at each end is separate; demurrage at one end cannot be offset by despatch at the other. Pro-shipowner.
  • Reversible: laytime is aggregated across both ends. Despatch at one end can offset demurrage at the other. Pro-charterer.
  • All-purposes (single block): the laytime is a single block applicable to both loading and discharging combined. Even more pro-charterer.
  • Average laytime (for multi-port charters): the average across all loading or all discharging ports.

The choice has significant commercial implications, particularly for charters where loading and discharging conditions differ markedly.

Demurrage

Concept

When the laytime is exhausted before operations are complete, the vessel is on demurrage. The charterer pays demurrage at the contractually agreed rate (typically USD per day or pro rata) for each subsequent day the vessel is held in port.

Demurrage rates are negotiated as part of the charter party and reflect:

  • The freight market (higher freight = higher demurrage).
  • The vessel type (Capesize > Panamax > Handysize for bulk).
  • The trade route (longer voyages support higher demurrage).
  • The commodity (some commodities pay premium demurrage for time-sensitive cargo).

Typical demurrage rates in 2024:

  • Capesize bulker: USD 20,000 to USD 50,000/day.
  • Panamax bulker: USD 12,000 to USD 25,000/day.
  • Supramax bulker: USD 8,000 to USD 18,000/day.
  • VLCC tanker: USD 30,000 to USD 70,000/day.
  • Aframax tanker: USD 18,000 to USD 35,000/day.
  • Container vessel: typically not on per-day demurrage (different commercial arrangement).

Once on demurrage, always on demurrage

A widely-adopted principle is that once the vessel is on demurrage (laytime exhausted), the time exclusions (SHEX, weather, etc.) cease to apply. This is sometimes called “once on demurrage, always on demurrage”. The principle is contractually variable; some charter parties specifically preserve weather exclusions even after demurrage commences.

Time bar

Demurrage claims must be presented to the charterer within a contractually agreed time bar (typically 60 to 90 days from completion of discharge). Late claims are barred. The time bar is strict and the shipowner’s claim must be properly documented (with the SOF and supporting evidence) before the deadline.

Despatch

Concept

When operations complete before the laytime is exhausted, the charterer is entitled to despatch: a refund of the unused time, typically at half the demurrage rate (the conventional “half despatch” or “1/2 despatch” provision).

Some charter parties specify “despatch on all time saved” (DATTS) covering all unused laytime; others restrict despatch to working time saved (excluding the SHEX/weather periods that wouldn’t have counted anyway).

Commercial significance

Despatch is significant for charterers, particularly for time-sensitive cargo (e.g. agricultural commodities at harvest peak). For bulk traders working tight margins, despatch can be the difference between a profitable and unprofitable voyage.

Statement of Facts (SOF)

Purpose

The Statement of Facts is a chronological log of port events maintained by the port agent. It records:

  • Vessel arrival at port limits, anchorage, berth.
  • NOR tendered, accepted, and any defects/objections.
  • Pilotage and tugs ordered, arrived, completed.
  • Berthing commenced and completed.
  • Cargo operations: commencement, interruptions (weather, equipment failure, shift change, lunch), resumption, completion.
  • Bunkering if undertaken in parallel.
  • Other delays: documentary delay, customs, port authority, strikes.
  • Departure: pilot boarded, lines released, vessel sailed.

Construction

The SOF is constructed by the port agent in real time during the call. The agent witnesses each event and records the time. The SOF is typically signed by:

  • The master (acknowledging the shipowner’s view of the events).
  • The shipper or cargo owner’s representative (acknowledging the cargo side’s view).
  • The port agent (as recordkeeper).

Disputes over SOF entries (typically about whether a particular interruption was weather or another cause) are common and are resolved through:

  • Independent surveyors.
  • Met office records (for weather disputes).
  • Port records (for berthing disputes).
  • Arbitration.

Importance for laytime calculation

The SOF is the evidential basis for the laytime calculation. The shipowner’s demurrage claim is built from the SOF: total time at the port minus laytime exclusions = laytime used. If laytime used > laytime allowed, demurrage is owed.

For multi-port charters, an SOF is maintained at each port; the laytime calculations are aggregated according to the reversible / non-reversible / all-purposes provisions.

BIMCO LAYTIMEDEFS 2013

Standardisation

The BIMCO Laytime Definitions for Charterparties (LAYTIMEDEFS) 2013 is a comprehensive glossary of laytime terms developed by BIMCO with industry consultation. The definitions provide standard interpretations for terms commonly used in charter parties:

  • Notice of Readiness, vessel readiness criteria.
  • Working day, weather working day, running day, consecutive days.
  • SHEX, SHINC, FHEX, FHINC, holidays definitions.
  • Reversible, non-reversible, all-purposes, average.
  • Once on demurrage always on demurrage.
  • Time bar provisions.

Most modern charter parties incorporate LAYTIMEDEFS 2013 by reference, providing immediate clarity on contested terms. Adopting LAYTIMEDEFS substantially reduces dispute frequency.

Common laytime disputes

Frequent areas of dispute:

  • NOR validity: was the vessel actually ready when NOR was tendered?
  • Berth availability: did “WIBON” or “WIPON” allow NOR from anchorage?
  • Weather: was an interruption truly weather-driven, or was it a port-side issue masked as weather?
  • Equipment failure: was an interruption the vessel’s equipment failure (charterer’s account if vessel-side) or a port equipment failure (charterer’s account if port-side)?
  • Shifting time: time spent shifting between berths counts how?
  • Bunkering during cargo operations: counts how if simultaneous?
  • Documentary delay: customs, classification, surveys, who pays?

These disputes are resolved through:

  • Direct negotiation between shipowner and charterer.
  • Mediation.
  • Arbitration (London LMAA, Singapore SCMA, New York SMA).
  • Litigation (rare; arbitration is the norm).

Implications for owners, charterers and brokers

Owners

For shipowners, laytime calculation is a routine commercial activity. Most owners maintain dedicated demurrage departments that:

  • Construct the laytime calculation from the SOF.
  • File timely demurrage claims within the time bar.
  • Negotiate disputed claims.
  • Coordinate with arbitration counsel for unresolved disputes.

Demurrage income can constitute 5 to 15% of total voyage revenue for active operators in the dry bulk and tanker markets.

Charterers

For voyage charterers (commodity traders, refineries, miners, grain merchants), laytime management is a cost-control discipline:

  • Pre-charter analysis of laytime terms vs likely port conditions.
  • Selection of efficient ports and stevedores.
  • Real-time monitoring of port performance.
  • Despatch claims to recover savings.
  • Vigorous defence of demurrage claims when documentation is weak.

Brokers

Charter party brokers play a critical role in laytime negotiation:

  • Advising on standard terms and current market practice.
  • Assisting with charter party drafting.
  • Mediating disputes between owner and charterer.
  • Maintaining standard charter party templates.

The principal commercial brokers (Clarksons, Howe Robinson, SSY, Braemar, Galbraith’s, Maersk Broker) all have specialised demurrage and laytime teams.

See also

Charter party and commercial frameworks

Regulatory and reporting

Voluntary frameworks

Operational efficiency

Marine fuels

Ship types

Calculators

References

  • BIMCO. BIMCO Laytime Definitions for Charterparties (LAYTIMEDEFS) 2013. BIMCO, 2013.
  • BIMCO. GENCON 2022: Voyage Charter Party. BIMCO, 2022.
  • BIMCO. Asbatankvoy: Tanker Voyage Charter Party. BIMCO and Asbatankvoy Committee.
  • Shell. Shellvoy 6: Shell Voyage Charter Party. Shell, 2014 with subsequent updates.
  • BP Shipping. BPVOY 5: BP Voyage Charter Party. BP Shipping, 2008 with subsequent updates.
  • BIMCO. Synacomex 2000: Grain Voyage Charter Party. BIMCO and FOSFA, 2000.
  • LMAA (London Maritime Arbitrators Association). Annual Reports and selected awards. LMAA, 2023 and 2024.
  • Cooke, Julian and others. Voyage Charters, 5th edition. Informa Law, 2022.
  • Schofield, John. Laytime and Demurrage, 8th edition. Informa Law, 2021.
  • Tiberg, Hugo. The Law of Demurrage, 5th edition. Sweet and Maxwell, 2018.

Further reading

  • BIMCO. BIMCO Chartering Update. Quarterly publication.
  • Maersk Broker. Demurrage Market Report. Maersk Broker A/S, ongoing.
  • Clarksons. Shipping Intelligence Weekly. Clarksons Research, ongoing.
  • IBIA. International Bunker Industry Outlook. International Bunker Industry Association, 2024.