__NOTOC__ In commercial

shipping Freight transport, also referred to as freight forwarding, is the physical process of transporting commodities and merchandise goods and cargo. The term shipping originally referred to transport by sea but in American English, it has been ...

, laytime is the amount of time allowed, measured in days (or portions thereof), hours, or even tides, within a

voyage charter Chartering is an activity within the shipping industry whereby a shipowner hires out the use of their vessel to a charterer. The contract between the parties is called a charterparty (from French 'parted document'). The three main types of chart ...

for the loading and unloading of cargo. Under a voyage charter or time charter, the shipowner is responsible for operating the vessel, and the master and crew are the employees of the shipowner, not the charterer. However, once the vessel has "arrived" at a port the charterer then assumes responsibility for the loading and unloading of cargo and has a period of laytime in which to carry that out. The actual loading may be performed by a third-party

stevedore A dockworker (also called a longshoreman, stevedore, docker, wharfman, lumper or wharfie) is a waterfront manual laborer who loads and unloads ships. As a result of the intermodal shipping container revolution, the required number of dockwork ...

. The moment that laytime commences is determined by a Notice of Readiness (or "NOR"), which the

master Master, master's or masters may refer to: Ranks or titles In education: *Master (college), head of a college *Master's degree, a postgraduate or sometimes undergraduate degree in the specified discipline *Schoolmaster or master, presiding office ...

or agent of the ship must give to the port when the ship has arrived at the port of loading or discharge. The charterparty contract determines the precise meaning of "arrival". Usually, "arrival" is when the ship has arrived at the port and is ready in all respects to load or discharge; but it may be, say, when the ship has passed buoy #2 in the approach channel, or once the vessel has pass through lock gates. If the charterer does not comply with the NOR, the carrier may cancel the contract and seek

damages At common law, damages are a remedy in the form of a monetary award to be paid to a claimant as compensation for loss or injury. To warrant the award, the claimant must show that a breach of duty has caused foreseeable loss. To be recognized at ...

. If the charterer's delay means that laytime is exceeded, a predetermined penalty (i.e.

liquidated damages Liquidated damages, also referred to as liquidated and ascertained damages (LADs), are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., lat ...

) called "

demurrage "Demurrage" in vessel chartering is the amount of liquidated damages owed by a charterer to a shipowner when the charterer remained in possession of the vessel for the purpose of loading and unloading ( laytime) beyond the time allowed by con ...

" is incurred. If the whole period of laytime is not needed, a refund called "despatch" may be payable by the shipowner to the charterer. Despatch is normally paid at 50% of the demurrage rate, but that depends on the terms of the

charterparty A charterparty (sometimes charter-party) is a maritime contract between a shipowner and a hirer ("charterer") for the hire of either a ship for the carriage of passengers or cargo, or a yacht for leisure. Charterparty is a contract of carria ...

. The ship may thus be able to leave port early. Despatch does not normally apply to tanker charters.

Case law

The

legal case Legal proceeding is an activity that seeks to invoke the power of a tribunal in order to enforce a law. Although the term may be defined more broadly or more narrowly as circumstances require, it has been noted that " e term ''legal proceedings'' ...

of Flacker Shipping Ltd. v Glencore Grain Ltd. (the ''Happy Day'') raised a question regarding the need for a valid NOR to be issued where an earlier NOR was submitted but not valid. Potter LJ, supported by Lady Justice Arden and Sir Denis Henry, ruled that Another case in 2011, Suek AG v

Glencore International AG Glencore plc is an Anglo-Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Glencore's oil and gas headquarters are in London, England as well as its primary listing being on the London Stock Exc ...

(The "Hang Ta"), addressed a difference of interpretation between the parties to the contract as to giving of a NOR at "a usual waiting place" instead of at the intended discharge berth. The intended berth was occupied, and also access was affected by inclement weather conditions, so there were two contending reasons for the delayed berthing. Glencore argued that the NOR was given too early and was therefore invalid, because the berth's occupation by another vessel was not the sole reason operating to affect berthing, but the court rejected their argument and supported SUEK.Nowak, S.
Competing Causes - Agreeing the Risk of Delay
''Steamship Mutual'', published 1 September 2011, accessed 2 February 2024

Lay days

"Laytime" should not be confused with "Lay days". The latter refers to the period within which the shipowner should make the vessel "ready" to the Charterer at the place and time agreed in the charter party. "Cancelling Date" is the last day of "Lay days" and acts as a deadline to tender "Notice of Readiness". A ship (vessel) failing to become an "Arrived Ship" by tendering a valid Notice of Readiness bears the risk of being refused/cancelled by Charterers as per Charter-Party provisions.

Case law

Lay days

References

External links

Further reading