Maritime & Ocean Freight Chartering

Port Laytime, Demurrage & Despatch Settlement Calculator

Calculate port laytime allowed vs used, demurrage fines, and despatch money. Generate charter party Statement of Facts (SOF) reports with instant calculation.

1. Overview & Logistics Industry Significance

In dry bulk and tanker charter party agreements, laytime represents the agreed contractual time window allowed by a vessel owner to a charterer to load and discharge cargo at maritime terminals. Because commercial cargo ships cost tens of thousands of dollars per day in capital expenditure, bunker fuel, and crew wages, port operational efficiency is strictly monitored through laytime calculations. When cargo loading or discharging operations exceed the agreed allowed laytime, the charterer becomes legally liable to pay liquidated damages known as "Demurrage" to compensate the shipowner for lost operational time. Conversely, if operations finish ahead of schedule, the shipowner frequently rewards the charterer with "Despatch" money (typically calculated at half the demurrage rate).

2. How It Works & Calculation Rules

Laytime calculation begins when a valid Notice of Readiness (NOR) is tendered by the ship master and accepted by the charterer or terminal. The contractual clock operates under specific agreed charter terms: 1. SHEX (Sundays and Holidays Excluded): Non-working weekend days and official port holidays do not count against the charterer's laytime allowance unless cargo operations are actively conducted. 2. SHINC (Sundays and Holidays Included): Laytime counts continuously 24 hours per day, 7 days per week, including weekends and public holidays. 3. Weather Working Days (WWD): Days on which atmospheric conditions (heavy rain for dry bulk grain, excessive swell, gale-force winds) permit cargo loading without risk of damage. Key Mathematical Formulas: - Net Laytime Used = Total Port Time - Contractual Deductions (rain stoppages, crane breakdowns, strikes). - If Laytime Used > Allowed Laytime: Demurrage Owed = (Laytime Used - Allowed Laytime) × Daily Demurrage Rate. - If Laytime Used < Allowed Laytime: Despatch Earned = (Allowed Laytime - Laytime Used) × Daily Despatch Rate (typically 50% of Demurrage Rate).

3. Step-by-Step Instructions

  1. Enter the Allowed Laytime (in days or running hours) specified in your voyage charter party agreement (e.g. Gencon, Norgrain, Asbatankvoy).
  2. Input the Actual Laytime Used based on the terminal certified Statement of Facts (SOF).
  3. Specify the contractual daily Demurrage Rate in US Dollars.
  4. Select the agreed Despatch Policy (Half Despatch / Despatch Half Demurrage, Equal Despatch, or Free Despatch).
  5. View the net settlement calculation: exact Demurrage penalty payable or Despatch refund earned.

4. Practical Real-World Example

A Panamax bulk carrier charter agreement stipulates 5.0 allowed laytime days at a demurrage rate of $24,000 per day with a "despatch half demurrage" policy ($12,000/day). The Statement of Facts confirms cargo discharge was completed in 3.25 days. The charterer saved 1.75 laytime days, earning a net Despatch reward of $21,000 (1.75 days × $12,000/day).

Frequently Asked Questions (FAQ)

What is the difference between Demurrage and Despatch in maritime shipping?

Demurrage is a financial penalty paid by the charterer to the shipowner for failing to complete cargo loading or discharging within the contractually agreed laytime. Despatch is an incentive bonus paid by the shipowner to the charterer for completing operations faster than allowed laytime.

What does the maritime legal maxim "Once on Demurrage, Always on Demurrage" mean?

Under standard maritime charter parties, once allowed laytime has completely expired and the vessel enters demurrage status, contractual exclusions (such as Sundays, holidays, bad weather, or non-working periods) no longer pause the clock. The demurrage penalty runs continuously 24 hours a day until cargo operations are completed.

What is a Statement of Facts (SOF) document?

A Statement of Facts (SOF) is an official chronological log maintained by the ship master, port agent, and terminal superintendent during a port call. It records exact timestamps for Notice of Readiness (NOR) tender, berthing, shifting, cargo commencement, weather stoppages, crane breakdowns, and completion of loading/discharging.

What is the standard ratio between Despatch and Demurrage rates?

The standard maritime industry convention is "Despatch Half Demurrage" (DHD), meaning the daily despatch rate is exactly 50% of the agreed daily demurrage rate, although parties can negotiate 1:1 or zero despatch in custom charter clauses.