"Laycan" is a term used in the shipping industry, and it stands for "Laydays commence and Cancelling date." It refers to a specific period during which a vessel is allowed to arrive at the loading port for a particular charter party. The laycan defines a range of dates during which the vessel can be on site and ready to load a cargo or go on timecharter. The duration of the laycan period can vary substantially in the different shipping markets, from48 hours in the tanker market to up to 15 days in other sectors.
The laycan period consists of two key dates:
1. Laydays commence: This is the earliest date within the laycan period when the vessel can arrive at the port and begin loading a cargo. Laydays are determined by the terms of the charter party andare agreed upon by the owner and charterer. The charterer can refuse to load the cargo if the vessel arrives before the Laydays as very often the cargo will not be available.
2. Cancelling date: This is the final datewithin the laycan period by which the vessel must arrive at the loading port; otherwise, the charter party may be canceled or subject to penalties. If thevessel fails to arrive by the cancelling date, the charterer may have the option to terminate the contract or seek compensation for any delays incurred.
The laycan is a critical aspect of charterparty agreements because it helps ensure that both the shipowner and the charterer can plan their operations and logistics effectively. It provides a window of time during which the vessel should be available for loading, taking into account factors like weather conditions, berth availability, and cargo readiness. The punctuality of the vessel is critical for the planning of operations in the port as it can impact storage, production and subsequent shipments. If the vessel arrives outside the laycan period, it can lead to disputes and financial consequences, so adhering to these dates is important in the shipping industry.
The Charterparty will stipulate that the shipowner on a regular basis has to give honest and accurate ETAs (EstimatedTime of Arrival). If the vessel is delayed while underway to the loading port the charterer will then have the option to cancel the voyage and try to find another vessel. The charterparty will stipulate the amount of time that charterers have to decide whether to cancel the ship or maintain the contract. If the contract is maintained, the owners and charterers will agree on a new Laycan reflecting the delay of the vessel.
The laycan period is also used to determine the commencement of laytime, which is the period during which the owner of a vessel will make and keep the vessel available for loading or discharging without payment additional to the freight.
