Chapter 6: Time counting Flashcards
(16 cards)
So, the charterers must make the necessary. charterparty arrangements for when a ship arrives at port… what comes to mind?
A vessel only makes money when it is moving
Therefore it should spend as little time at port as possible
- the speed of loading and discharging is agree during chartering negotiations and is expressed in terms of of the tonnes per day. The tonnes per day will result in the number of days or hours to be devoted to the loading and discharging operation.
How is the time of loading and discharging stipulated in charterparties?
When parties negotiate a shipping contract, they agree on how fast cargo will be loaded onto and discharged (unloaded from) the ship.
This speed is not expressed in hours directly, but rather in tonnes per day — how many tonnes of cargo can be handled per day.
Once you know how many tonnes you need to load/unload, and the agreed rate (tonnes/day), you can calculate how many days or hours it will take.
Example:
If 10,000 tonnes must be loaded and the agreed rate is 2,000 tonnes/day → it will take 5 days.ours to be devoted to the loading and discharging operation.
There can be different rates or times agreed for loading and discharging.
Alternatively, both loading and discharging can be combined into a single lump time (e.g., 10 days total to do both).
This is important for both scheduling and financial reasons, especially when demurrage (penalties for delay) or despatch (rewards for early completion) come into play.
What should the charterer keep in mind when deciding on the loading and discharge rates?
the rate might depend on the cargo handling appliances (cranes, conveyor belts, forklifts, specialised grabs/pumps for liquids or bulks) available at the port of call.
This will not entirely dictate the rate but it will later become clear later when the subject of demurrage and despatch is considered i.e. f a port is slow due to bad equipment, and you agreed to a fast rate, you might end up paying demurrage — unless this was anticipated and accounted for in the contract.
Bottom line:
Port equipment affects how fast cargo can be handled, which influences — but doesn’t fully determine — the agreed rate. This becomes important when timing penalties or rewards (demurrage/despatch) come into play.
Can you explain the overtime clause in a CP and how does it affect the charterparty if such work is ordered
The overtime clause in a charter party (CP) specifies whether cargo operations—such as loading and discharging—can be carried out outside normal working hours (including nights, weekends, and holidays), and most importantly, who will bear the cost of the additional labor. When such work is ordered, the effect on the charter party depends on how the clause is worded. If the clause states that overtime is “for Charterers’ account,” then the charterer is responsible for paying the overtime charges. If it is “for Owners’ account,” the shipowner must cover the cost. The clause may also dictate who has the authority to order overtime—either the master, the charterer, or by mutual agreement—which can influence operational flexibility. Ordering overtime can speed up cargo handling, which in turn affects laytime calculations and the potential for demurrage (penalty for delay) or despatch (reward for early completion). Therefore, charterers may strategically choose to authorize overtime to avoid costly delays, while shipowners may avoid it if the cost falls on them. Ultimately, the overtime clause plays a key role in determining cost responsibility, operational control, and the timing of port activities within the broader charter agreement.
what does the wording ‘actually used’ mean in a CP
“actually used” means that time only counts (e.g., toward laytime) if cargo handling is actively happening — it protects both parties from being charged for non-working hours unless work was genuinely done.
What is ‘SSHINC or SSHEX’ in a charterparty
Under SSHINC, all calendar days count, including weekends and holidays.
Under SSHEX, weekends and holidays are skipped — they don’t reduce the laytime unless the CP adds a clause like “if actually used, to count in full.”
Multiform Charter Party
A general-purpose voyage charter party form.
Designed to handle various types of bulk cargo (not specific to one kind).
More flexible and adaptable across different trades.
what is the difference between laytime and laydays
Laytime refers to the amount of time allowed for the charterer to load and unload cargo without incurring a penalty, typically measured in hours or days. It starts when the notice of readiness (NOR) is given and accepted, and it ends when the cargo operations are completed. If the loading or unloading exceeds the agreed laytime, the charterer must pay demurrage (penalty for delay), whereas if the operations are completed earlier, the charterer may receive despatch (a reward for early completion). On the other hand, laydays (or “laycan”) refer to the date window within which the ship must arrive at the port and be ready to load. This is typically given as a range of calendar dates (e.g., 1st–10th May). If the ship arrives before the laydays, the charterer is not obligated to accept it yet, but if the ship arrives after the cancelling date, the charterer may choose to cancel the charter. In summary, laydays determine when the vessel must be ready for cargo, while laytime refers to how much time the charterer has to load and unload without incurring extra charges.
Grainvoy Charter Party
A specialized voyage charter party form.
Specifically created for grain cargoes in bulk.
Tailored to grain trade terms, logistics, and port practices.
when does time start to be counted?
In practice, the concept of Notice of Readiness (NOR) is crucial in determining when laytime begins in a charter party. The NOR is the formal notification from the ship’s master to the charterer that the vessel is ready to begin loading or unloading, and it marks the start of the laytime clock. However, as you pointed out, the NOR can be tendered before the vessel is even alongside the berth, and this raises a question of how the master can claim the ship is ready if it’s not yet in position. The master’s declaration that the vessel is ready must be taken on trust, and this is where industry practices and customs come into play.
In practice, the ship’s master will typically base their affirmation of readiness on a combination of factors. These include the completion of essential preparations like securing the crew, ensuring the ship’s holds are clean and ready for cargo, and having necessary equipment in place. The master’s judgment is generally accepted unless there is a clear reason to dispute it. The shipowner’s liability to ensure the vessel is ready for cargo operations means that, even if the vessel isn’t physically at the berth yet, if the ship is sufficiently prepared (for example, waiting in the vicinity or at an anchorage), the NOR can still be validly tendered.
This practice is based on trust and the understanding that the master has the necessary experience to assess readiness accurately. It also acknowledges the commercial realities of shipping, where timing is critical, and delays can lead to costly penalties or disruptions. The charterer’s role is to accept the NOR, but they have the right to challenge the validity if they believe the vessel is not genuinely ready. In some cases, disputes may arise, but they are typically resolved by the terms of the charter party, with the burden on the owner to prove readiness if questioned. This balance of trust and accountability is a standard and accepted part of maritime operations.
What should a port agent keep in mind when it comes to NOR?
Vessel Readiness: The port agent must ensure that the vessel is genuinely ready to load or discharge cargo before the NOR is tendered. This includes confirming that the ship has arrived at the port (or is at an anchorage close to the port), and that essential preparations have been completed. For example, the vessel should have its holds cleaned, its cargo gear ready, and the crew prepared for cargo operations. The shipmaster’s declaration that the vessel is ready is critical, but the port agent should ensure that the vessel’s readiness aligns with this declaration.
NOR Timing: The agent must understand the charter party terms regarding when the NOR should be tendered. If the NOR is tendered before the vessel is ready, it can be considered invalid. Therefore, the agent should be mindful of the vessel’s actual position and status, as well as the agreed laycan or laydays in the charter party. If the vessel is not yet at the berth or not ready for cargo operations, the agent should not allow the NOR to be tendered prematurely.
Documentation: The agent should ensure that the correct documentation is prepared and submitted alongside the NOR. This might include the Ship’s Log, the Declaration of Readiness, and any other required certificates, such as the ship’s free pratique (permission to enter the port). The port agent needs to make sure that these documents are accurate and up-to-date, as they can be critical if any dispute arises over the validity of the NOR.
Communication with Charterer and Owner: The port agent should act as a communication link between the shipowner and the charterer. They must promptly inform both parties of the NOR’s tender and its acceptance. If there are delays or issues with the NOR, the agent should keep both parties informed, helping to resolve any disputes that might arise, such as if the NOR is rejected due to the vessel not being fully ready.
Port-Specific Procedures: The agent should be well-versed in local port regulations and customs, as these can affect the timing and acceptance of the NOR. Different ports may have varying procedures regarding what constitutes “readiness” and what is required for a valid NOR to be tendered. The port agent must be familiar with these specifics to ensure that the NOR complies with local rules.
Handling Disputes: In case of a dispute regarding the validity of the NOR (e.g., the charterer argues that the vessel wasn’t actually ready), the agent may need to mediate or provide evidence. This might include details about the ship’s arrival, the preparation of cargo holds, or the vessel’s position. The agent should maintain a record of all communications, actions taken, and observations to support either party’s case if needed.
What is ‘once on demurrage, always on demurrage’?
The phrase “once on demurrage, always on demurrage” is a legal principle used in charter parties to refer to the continuous accumulation of demurrage charges once they have started. In simple terms, it means that once the vessel enters demurrage (i.e., the period where loading or unloading takes longer than the agreed laytime), it will continue to accumulate demurrage charges until the cargo operation is fully completed, regardless of whether the delays continue or not.
can you explain the time that does not count towards laytime?
In general, the time that does not count towards laytime includes:
Time waiting for a berth (port congestion).
Time before the NOR is accepted or when the NOR is rejected.
Time lost due to force majeure events (weather, strikes, etc.).
Time spent on cargo inspections, surveys, or fumigation.
Holidays and weekends (if excluded by the charter party).
Time lost due to port inefficiencies or equipment failures.
Time due to legal or administrative delays (such as customs clearance).
What is despatch?
Despatch (or despatch money) is a term used in shipping and charter parties to refer to a reward paid by the shipowner to the charterer when loading or discharging of cargo is completed faster than the agreed laytime.
The rate of despatch money is half that agreed for demurrage.
Common in dry cargo trades.
Port agent should keep in mind that sometime s ashipper/receiver will neogtionate a slower rate of loading/discharge to reap the benefit of despatch,
How to put together a timesheet to calculate demurrage/despatch?
- the port agent must have all the raw materials (in the form of statement of facts).
- ## BIMCO statement of facts form
