CHARTRINGCHARTERINGCHARTERING 101By Akash Pise MICS

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Contents

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Laytime

Laytime Calculation

Statement of Facts

Duration of Laytime

Commencement of Laytime

Laytime: Interruptions

Demurrage and Dispatch

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Laytime

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➢ Laytime is the time permitted in a contract for loading and/or discharging a voyage chartered ship.

➢ Laycan (Laydays/Cancelling) is a period of time within which the vessel should arrive at loading port and tender notice ready for loading without risk of being rejected by the charterers.

➢ As indicated in the name itself, ‘laycan’ is an agreed time range at the end of which comes the date when the charterers are entitled to exercise their option and cancel the charter party for non-arrival of the owners’vessel.

➢ This period is expressed as two dates, for example laydays 22 March cancelling 24 March or, when abbreviated as laycan, laycan 22/24 March.

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Laytime

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➢ The cancelling date is the final layday and the date beyond which, if the chartered vessel has not been presented for loading, the charterers may not accept the ship and cancel the charter.

➢ The charterers will not be entitled to cancel the charter before the stated cancelling date, even when it is obvious that the vessel cannot arrive at the loading port by this date.

➢ Laydays and cancelling are often called the “laycan” and represent the period within which the vessel must be presented at the agreed port or place.

➢ If the vessel arrives before the first day of the period, the charterers do not have to accept her until commencement of the agreed laydays.

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Laytime Calculation

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➢ The calculation of laytime can be divided into seven stages:

➢ 1.Read the relevant Clauses in the governing ‘contract’.

➢ 2.Obtain the ‘statement of facts’.

➢ 3.Determine how much laytime is available, (‘duration’) and deadfreight.

➢ 4.Establish the ‘commencement’ of laytime. Allow for ‘interruptions’ to laytime.

➢ 5.Establish when laytime will cease, i.e. ‘cessation’

➢ 6.Calculate final laytime and how much ‘despatch’ or ‘demurrage’ is payable.

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Statement of Facts

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➢ Produced by the port agent. Contains the vital information necessary for the production of the laytime calculations

Contains:➢ The time ‘NoR’ was tendered and accepted➢ Vessel’s date & time of arrival, berthed/shifted to another berth, cargo

operations commencement, interruptions, completion and departure➢ Weather conditions➢ Other various relevant information➢ Interested parties sign the completed SOF form, i.e. Master-Port Agents-

Shipper/Receiver in order to avoid unnecessary dispute.➢ If one of the parties has an objection to the contents of a SOF form, it

should be signed ‘under protest’, a statement being added, clarifying the reason for the objection.

➢ It is therefore a detailed calendar stating exactly what has been happening in connection with the cargo operations from the moment the vessel arrives in port until the loading or discharging operations are completed and the vessel sails.

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