Laytime

What it does

Laytime is the amount of time the owner agrees to make the vessel available for cargo operations without extra payment. It is the free period within which the charterer must load or discharge, and only once it is exhausted does the charterer start paying demurrage. The laydays, by contrast, are the window within which the ship must arrive and tender notice; the two terms are often confused but address quite different things.

Laytime can be expressed in several ways: a fixed number of days or hours, a number of days of a defined type such as weather working days, or as a rate of so many tonnes worked per day from which the allowance is derived against the cargo quantity. How it is expressed determines what counts against it and how interruptions for weather, holidays, or shore delays are treated in the count.

Commercial effect

The length and definition of laytime is one of the most heavily negotiated terms in any voyage fixture, because it sets the boundary between free time and paid time. A longer or more generously defined allowance shifts delay risk to the owner; a shorter or tightly defined one pushes it onto the charterer. The freight rate and the laytime terms are bargained together as a single commercial package.

How laytime is defined matters as much as its length. An allowance of weather working days that excludes Sundays and holidays can be worth far more to a charterer than the same number of running days counted continuously, because the excepted periods stop the clock. The interaction with notice of readiness, any turn time, and the excepted periods decides when the count actually starts and when it stops.

Owner's perspective

The owner wants laytime defined tightly and counted continuously wherever possible, so that the free period is short and demurrage begins sooner. Running days, few exceptions, and a clear early start to the count all serve the owner by limiting the time the vessel is held without additional earning. The owner sees laytime as time during which the ship is already working for the freight agreed.

The owner also wants certainty about when laytime commences, which is why the rules on notice of readiness and any turn time are negotiated alongside the allowance itself. A laytime clause that is generous in length but starts late and stops often can cost the owner as much as a short one, so the owner reads the definition and the length of the allowance together rather than in isolation.

Charterer's perspective

The charterer wants laytime long enough, and defined flexibly enough, to cover realistic cargo operations at the ports in its trade, including the weather, congestion, and shore delays it expects to meet. Each excepted period and each interruption built into the definition is protection against beginning to pay demurrage for delays the charterer regards as outside its own control.

The charterer assesses laytime against the terminals it actually uses. A berth with slow equipment or frequent bad weather needs either more days or a definition that stops the clock during those periods. The charterer also aligns the laytime it agrees with the owner against the laytime in its sale or sub-charter contracts, so that it does not carry an unfunded gap between the two.

Negotiation points

• The length of the allowance, expressed as fixed time, days of a defined type, or derived from a daily cargo-handling rate.
• The type of day counted (running, working, or weather working) and which periods are excepted.
• When laytime commences relative to notice of readiness and any turn time allowed before counting starts.
• Whether load and discharge laytime are separate or reversible (pooled across ports).

Common variations

• A fixed total of days or hours for the whole operation.
• A daily cargo-handling rate from which the allowance is calculated against the cargo quantity.
• Weather working days of a stated number, excluding Sundays and holidays unless used.
• Reversible laytime, pooling load and discharge time so a saving at one port offsets an overrun at the other.