What is laytime?
Laytime is the period of time, agreed in the charter party, that the charterer is allowed for loading and discharging the cargo without extra payment. Once that allowed time is exhausted the vessel goes on demurrage; if the work finishes early the charterer may earn dispatch.
In a voyage charter the owner sells the carriage of a parcel and prices in a finite number of days for cargo work at each end. That allowance is laytime. It is not the actual time taken; it is the contractual budget against which actual time is measured. The clock that counts down that budget runs on the basis set out in the charter party, and it usually starts only after a valid notice of readiness has been tendered and any notice period has expired. The Laytime Definitions for Charter Parties 2013 (LDCP 2013), published jointly by BIMCO, the Baltic Exchange, CMI and FONASBA, give the agreed market meaning of the terms used to define and count laytime, and most modern fixtures incorporate them either by reference or by adopting their wording.
Laytime is the central commercial clock of a voyage charter. Get the allowance and the counting rules wrong in the recap and the demurrage exposure can swamp the freight margin on a marginal cargo.
How laytime is calculated
Allowed laytime is derived from the cargo quantity and the agreed loading and discharging rate, and actual time used is read off the master’s statement of facts. The core formula (T1) is:
Allowed laytime (days) = Cargo quantity (tonnes) divided by Agreed rate (tonnes per day)
Where the variables are:
- Cargo quantity: the bill of lading quantity, or the charter-party quantity if the clause fixes laytime on the contractual figure rather than the loaded figure.
- Agreed rate: the load or discharge rate stated in the charter party, expressed in metric tonnes per day or per weather working day. A separate rate may apply at each port.
- Day type: whether the day is a running day, a working day, or a weather working day, and whether Sundays and holidays count. This is what converts a calendar duration into countable laytime.
When the charter fixes laytime as a fixed number of days rather than by rate, the quantity-over-rate step is skipped and the stated days are used directly. Time actually used is then the sum of countable periods at load and discharge, with interruptions (rain stoppages on weather working days, excepted periods, time before NOR validity) deducted per the clause. The difference between allowed and used is either time saved (dispatch) or time on demurrage.
| Laytime statement line | Time | Note |
|---|---|---|
| Allowed laytime (load and discharge combined) | 5 days 12 hr 00 min | Reversible; from quantity / rate |
| Time used at load port | 2 days 18 hr 30 min | Per statement of facts, weather deductions applied |
| Time used at discharge port | 3 days 06 hr 00 min | Per statement of facts |
| Total time used | 6 days 00 hr 30 min | Sum of both ports |
| Result: time on demurrage | 0 days 12 hr 30 min | Used exceeds allowed, so on demurrage |
The statement above shows the standard five-line laytime statement that a broker or owner’s claims handler produces to support a demurrage or dispatch claim. The figures are representative and anonymised.
How laytime connects to demurrage, dispatch and notice of readiness
Laytime does not stand alone. It is the hinge between several charter-party clauses, and a change to any one of them moves the laytime result. The dependency map below shows the adjacent terms and how each connects to the laytime clock.
| Related term | How it connects to laytime | Page |
|---|---|---|
| Notice of readiness | Tendering a valid NOR is what starts the laytime clock, subject to the notice period in the clause; an invalid NOR can mean laytime never began. | Notice of readiness |
| Demurrage | When laytime is exhausted and cargo work continues, the vessel goes on demurrage at the agreed daily rate; demurrage is the price of overrunning laytime. | Demurrage |
| Dispatch | If cargo work finishes before laytime expires, the time saved earns dispatch, conventionally paid at half the demurrage rate on time saved. | Dispatch |
| Loading and discharging rate | The agreed rate in tonnes per day is the denominator that converts cargo quantity into allowed laytime; a faster rate means fewer allowed days. | Loading and discharging rate |
| Laycan | Laycan fixes the window for the vessel to arrive and tender NOR; arrival outside the cancelling date can let the charterer cancel before any laytime question arises. | Laycan |
Read together, these clauses form the operational spine of the voyage charter. The NOR opens the clock, the rate sets the budget, laytime counts the budget down, and demurrage or dispatch settles the difference. For the wider contractual frame in which these clauses sit, see the ship chartering hub.
How a laytime clause is worded
A laytime clause in a GENCON-style voyage charter typically does three things: it states the allowed time or rate, it defines the day type, and it sets out when and how the clock can be interrupted. The annotated wording below is representative GENCON-style drafting, not text copied from any confidential fixture.
Riders commonly bolt on a notice period for NOR, a turn-time allowance before laytime starts, and a list of excepted periods. The exact words matter: a single clause variation, such as switching SHEX to SHINC, can change the demurrage outcome by a full day or more.
Worked laytime statement
The following worked example (T2) shows the full calculation from rate to result, using representative, anonymised numbers.
A vessel fixes a 50,000 tonne parcel of iron ore on a single laytime allowance, reversible, at an average rate of 10,000 metric tonnes per weather working day across load and discharge combined.
Step 1, allowed laytime: 50,000 tonnes divided by 10,000 tonnes per day = 5.00 days allowed.
Step 2, time used at load: NOR tendered and accepted, turn-time of 12 hours passes, then loading runs. Per the statement of facts, countable time at the load port is 2 days 06 hr 00 min after deducting 8 hours of rain on a weather working day.
Step 3, time used at discharge: countable time at the discharge port is 3 days 04 hr 00 min, with Sundays excepted under SHEX.
Step 4, total used: 2 days 06 hr 00 min plus 3 days 04 hr 00 min = 5 days 10 hr 00 min.
Step 5, result: allowed 5 days 00 hr 00 min, used 5 days 10 hr 00 min, so the vessel is 0 days 10 hr 00 min on demurrage. At a demurrage rate of USD 18,000 per day pro rata, that overrun is worth (10 / 24) x 18,000 = USD 7,500 payable by the charterer to the owner.
Had the vessel instead finished in 4 days 12 hr 00 min, it would have saved 0 days 12 hr 00 min, earning dispatch at half the demurrage rate: (12 / 24) x (18,000 / 2) = USD 4,500 payable by the owner to the charterer.
Weather working days, SHINC and reversible laytime
The conventions that govern the count are where most laytime disputes start. The non-obvious points (T3) are these.
Weather working days versus running days. A running day is a full calendar day that counts regardless of weather or working hours. A working day is a day on which work normally takes place at the port. A weather working day (WWD) is a working day on which weather permits cargo work; time during which weather actually prevents or interrupts loading or discharging is not counted. The LDCP 2013 definitions distinguish a “weather working day” from a “weather working day of 24 consecutive hours,” and the difference changes how a partial weather stoppage is deducted, so the exact phrase in the clause governs.
SHINC versus SHEX. SHINC means Sundays and holidays included: they count as laytime. SHEX means Sundays and holidays excepted: they do not count. A fixture quoted SHEX gives the charterer more calendar time to do the same cargo work, which reduces demurrage risk. Whether time used during an excepted period still counts if work in fact proceeds depends on the wording, for example “unless used” variants.
Reversible versus non-reversible laytime. Reversible laytime aggregates the allowance across load and discharge into one pool, so time saved at one port offsets time lost at the other. Non-reversible (separate) laytime counts each port against its own allowance, so a fast load cannot subsidise a slow discharge. Reversible laytime generally favours the charterer because it nets the two ends.
Once on demurrage, the common-law principle that “once on demurrage, always on demurrage” means the excepted-period protections that interrupt laytime usually stop applying, unless the demurrage clause expressly preserves them. P&I clubs such as Gard, the UK Club and the North of England club publish detailed claims guidance on these points, and the Voylayrules 1993 remain a reference set of laytime definitions still seen in older or specialised forms.
Scope and what this page does not cover
This page explains what laytime is, how allowed laytime is derived from cargo quantity and the agreed rate, how the laytime clock connects to notice of readiness, demurrage and dispatch, and the day-counting conventions (WWD, SHINC versus SHEX, reversible versus non-reversible) that drive the result. It does not provide live demurrage or freight rates: those move daily and benchmarks should be taken from the Baltic Exchange. It does not give jurisdiction-specific case law or arbitral authority, and it is not clause-by-clause drafting advice. For a binding laytime calculation on a real fixture, work from the executed charter party and the master’s statement of facts, and take legal or P&I advice on disputed deductions.