Shipping & logistics

Laytime

The time agreed in the contract during which the charterer or buyer may use the ship to load or discharge without paying extra. It is usually stated as a daily rate, e.g. “5,000 mt per day SHINC” (Sundays and holidays included) or “SHEX” (excluded). Laytime starts after the Notice of Readiness (NOR) is tendered and any agreed turn time has passed. If it is exceeded demurrage is due; if cargo work finishes early, despatch may be earned where agreed.

Related terms

Demurrage and detention

In bulk shipping, demurrage is the daily compensation the charterer pays the shipowner when laytime is exceeded (e.g. USD 15,000 per day). In container shipping, demurrage is charged by the line when a full container stays in the terminal beyond its free time, and detention when the container is kept outside the terminal – at the buyer’s warehouse – beyond its free time. Customs delays inflate these costs quickly, so free days should be settled when negotiating freight.

Charter party (C/P) C/P

The contract between a shipowner and a charterer governing the use of a ship. Under a voyage charter a specific cargo is carried between named ports at a freight per tonne; under a time charter the ship is hired for a period at a daily rate; under a bareboat charter it is leased without crew. Standard forms include GENCON, NYPE and ASBATANKVOY. Bulk sales contracts should be drafted so that loading rates and demurrage terms are back-to-back with the charter party.

Notice of readiness (NOR)

A written notice from the master or agent to the charterer or buyer that the vessel has arrived at the agreed port and is ready in all respects – holds clean, clearances obtained – to load or discharge. A valid NOR is the precondition for laytime to start. A NOR tendered when the ship is not actually ready may be invalid and changes the demurrage calculation, so it should be filed together with hold inspection reports.

Explained in the trade handbook

Trade handbook