Laytime is the time allocated in the charterparty for the loading and unloading of cargo at a specified port. Laytime is the time during which the charterer has the right to use the vessel for these operations without incurring demurrage or earning despatch.
In shipping, laytime is an important concept in a charterparty. As a contract in the maritime shipping industry, governing the use of a vessel for the transportation of goods by sea, the laytime impacts the operational efficiency and financial outcomes for both the shipowner and the charterer.
Laytime is typically calculated based on a set number of days, hours, or an amount of cargo to be loaded per hour or day. Laytime can be further specified in various ways, such as SHINX REV (Sundays and Holidays Included Reversible - meaning any time saved in loading can be additional time for discharging), SHEX (Sunday and Holidays Excluded), weather working days, etc.
The laytime starts when the vessel is ready to load or discharge cargo, as defined in the charterparty agreement, and it ends when the cargo operations are completed.
Laytime not counting:
Charterparties may include provisions for weather-related delays, shifting from anchorage to berth, delays due to technical problems on the ship, or force majeure events, which can impact the calculation of laytime. These provisions define how such events are accounted for in the laytime calculation.
Laytime provisions can vary significantly from one charter party to another, and the specific terms and conditions are negotiated between the shipowner and the charterer.
Clear and precise language in the charterparty is essential to avoid disputes and ensure that both parties understand their rights and responsibilities concerning laytime and related matters.
If the charterer exceeds the agreed-upon laytime, they are often required to pay demurrage to the shipowner. Demurrage is compensation for the time the vessel is detained beyond the laytime.
On the other hand, if the cargo operations are completed quicker than the agreed laytime, the shipowner may pay despatch money to the charterer as an incentive for efficient turnaround.
See our Shipping Academy article about Demurage and Despatch.
Laytime typically starts when the master of the vessel issues a valid Notice of Readiness (NOR) as per the terms and conditions of the charterparty, indicating that the vessel is ready to commence cargo operations. The vessel must be ready both physically and legally.
The laytime clock begins ticking from the time stated in the Note of Readiness (NOR), or from a set amount of time after Note of Readiness (NOR) has been tendered. The Note of Readiness (NOR) is a crucial document in the laytime calculation process, and the charterparty will usually include clauses stipulating how and when NOR can be tendered.
Laytime and Laycan are two different terms and should not be confused.
Laytime refers to the amount of time allowed for loading or unloading cargo without incurring additional charges, as specified in the charterparty agreement.
Laycan - also known as "Laydays commence and Cancelling date" - on the other hand, is the period during which the ship should be at the port ready to load or unload cargo.
