Laytime: Voyage Charter Time Accounting

Laytime is the block of time a voyage charter party grants the charterer to load or discharge cargo without incurring extra cost. It is the principal commercial variable of every voyage fixture. Get it right and the freight income nets cleanly; overshoot it and the demurrage meter runs, often at USD 20,000 to USD 70,000 per day depending on vessel size and market conditions. The laytime used calculator computes net laytime from port events; the laytime and demurrage calculator converts laytime excess or savings into a dollar amount.

The legal framework governing laytime in English law is dense and largely judge-made. The BIMCO Laytime Definitions for Charter Parties 2013 (LAYTIMEDEFS 2013), issued jointly by BIMCO, the Comite Maritime International (CMI), FONASBA, and INTERCARGO, codifies the key terms in a form parties can incorporate by reference into any charter party. The 2013 edition superseded Voylayrules 1993. Where a charter party incorporates LAYTIMEDEFS 2013, the defined terms in the glossary govern over any inconsistent custom or judicial gloss, subject only to express contrary provision in the charter party itself.

The economic logic of laytime

Voyage freight rates are calculated on the basis that a vessel will spend a predictable number of days at each port. The freight already prices in a normal turnaround. If the charterer holds the vessel longer than that, the shipowner loses revenue-earning days. Demurrage compensates for those days. If the charterer turns the vessel around faster, the shipowner earns the full freight without burning the assumed port days. Despatch, typically paid at half the demurrage rate, returns part of that windfall to the charterer.

The mechanism is therefore a time-allocation contract inside the freight contract. Laytime is not a penalty clause and not a liquidated-damages clause in the technical legal sense. English courts have consistently held demurrage to be agreed compensation for detention, not a penalty, and the charterer can’t challenge it on that basis even if the actual daily cost to the shipowner is lower.

LAYTIMEDEFS 2013 defines laytime at Article 2 as “the period of time agreed between the parties during which the owner will make and keep the vessel available for loading or discharging without payment additional to the freight.” That definition captures the three elements that every laytime dispute turns on: the agreed period, the owner’s obligation to maintain readiness, and the absence of additional freight during that period.

Voyage charter forms and their laytime clauses

Laytime doesn’t exist in the abstract; it exists in a charter party clause. Different forms treat the mechanics differently.

GENCON 2022 (the BIMCO general cargo voyage form and the most widely used dry cargo charter) carries laytime at Box 16 (laydays) and Clause 6. The 2022 revision tightened the NOR provisions: the master must tender NOR “whether in berth or not, whether in port or not, whether in free pratique or not, whether customs cleared or not” once the vessel arrives within the port. GENCON 2022 defaults to SHEX laytime counted in weather working days, with a 6-hour turn time after NOR before laytime commences.

Asbatankvoy (the dominant US tanker voyage form, administered by BIMCO on behalf of the Association of Ship Brokers and Agents) uses a different NOR mechanism. Clause 6 requires the master to tender NOR in writing within 6 hours of arrival at the terminal or the customary anchorage; laytime begins 6 hours after NOR, or upon commencement of loading/discharging if that happens first. Asbatankvoy uses running hours rather than weather working days for most tanker fixtures, reflecting 24/7 port operations.

Shellvoy 6 and BPVOY 5, used respectively by Shell and BP for their term contracts, incorporate bespoke NOR and laytime provisions that track the commercial reality of major-oil-company terminal operations. Both provide for simultaneous NOR acceptance and start of laytime on berthing, with detailed provisions for shore equipment failure.

GENCON Clause 5 also carries the freight-detention framework for the general provisions. Users incorporating LAYTIMEDEFS 2013 by reference typically add the incorporation in the special conditions box; without express incorporation, the definitions are persuasive but not binding.

The arrived ship doctrine

Laytime cannot begin until the vessel is an “arrived ship.” This is one of the most litigated concepts in charterparty law. The test differs depending on whether the charter is a port charter or a berth charter.

Under a port charter, the vessel is an arrived ship when it is within the port and is at the immediate and effective disposition of the charterer. The leading authority is The Johanna Oldendorff [1974] AC 479 (House of Lords). Lord Reid established that the vessel must be within the “port area” and must be waiting at a place where vessels waiting for the relevant berth commonly wait. Waiting at the standard anchorage for that port satisfies the test. Waiting outside the port limits does not.

Under a berth charter, arrival requires the vessel to reach the specific berth named or intended. If no berth is available, the vessel is not an arrived ship and laytime doesn’t run. That is a heavy commercial consequence for the shipowner. The WIBON (whether in berth or not) clause, discussed below, was developed specifically to address this.

LAYTIMEDEFS 2013 Article 3 defines “arrived ship” as: a vessel that has arrived at the agreed destination and is at the immediate and effective disposition of the charterer. The “immediate and effective disposition” standard requires that the vessel be ready to move to the berth or loading point immediately when called to do so, without any further voyage to reach the commercial area of the port.

The doctrine matters practically whenever a port is congested. At the Port of Tubarao (Praia Mole iron ore terminal, Brazil), vessels routinely wait 5 to 15 days at anchor before a berth becomes available. Under a berth charter without WIBON, that entire waiting period is on the shipowner’s account. Under a port charter or with WIBON, the time counts against laytime from the moment the NOR is tendered and the vessel is at anchor in the designated waiting area.

Notice of Readiness

The Notice of Readiness (NOR) is the master’s formal declaration that the vessel has arrived and is ready to load or discharge. It is the trigger for laytime, not merely an administrative formality. An invalid NOR doesn’t start laytime, and the master must re-tender once the deficiency is corrected. The NOR tendering calculator models the time computations from NOR tender to laytime commencement.

Physical and documentary readiness

The vessel must be ready in all respects, not merely present. “Ready in all respects” has a technical meaning in charterparty law. Holds must be clean and fit for the intended cargo; hatches must be operational; the vessel’s bills of health must be in order for the port health authority; free pratique must be granted or grantable. GENCON 2022 expressly excepts free pratique and customs clearance as conditions precedent to a valid NOR, but many other forms require them.

The Mexico 1 [1990] 1 Lloyd’s Rep 507 established that an NOR tendered when holds were not clean was invalid; the clean bill standard applied to the whole cargo space intended for the relevant cargo. The master who tenders NOR before holds are ready takes the risk that the NOR is void and that laytime restarts only from the re-tendered NOR.

The WIBON, WIPON, WICCON, and WIFPON clauses

These four qualifications modify when the vessel becomes an arrived ship for NOR purposes. Their precise meanings are codified in LAYTIMEDEFS 2013.

WIBON is the most commercially important. It shifts the congestion risk from the shipowner to the charterer: if the berth isn’t ready, laytime still runs from NOR once the vessel is at the waiting anchorage. The Mexico 1 and The Laura Prima [1982] 1 Lloyd’s Rep 1 both turned on WIBON language in Asbatankvoy. In The Laura Prima, the House of Lords held that the WIBON clause in Asbatankvoy did not allow the master to tender NOR from the customary anchorage if the anchor berth was part of the loading operation, rather than a waiting anchorage. The Kyzikos [1989] 1 Lloyd’s Rep 1 later clarified that “whether in port or not” and similar formulations do not themselves make bad weather irrelevant to the readiness assessment.

WIFPON and WICCON are routine in tanker charters, where health authority inspections and customs clearance can take several hours after arrival. Without them, the shipowner bears the wait.

The notice period and turn time

Most charter parties build in a gap between valid NOR and laytime commencement. GENCON 2022 Clause 6 provides 6 hours. Asbatankvoy provides the lesser of 6 hours or commencement of operations. This gap, called the “turn time” or “notice time”, compensates the charterer for the reasonable organisational time needed to get labour and equipment to the berth after receiving NOR.

LAYTIMEDEFS 2013 Article 8 defines “notice time” as “the period of time, if any, agreed between the parties, that has to elapse after giving a valid NOR before laytime commences.” The turn time runs whether or not the vessel has berthed; it’s a clock gap, not a conditional. If loading starts before the turn time expires, laytime runs from actual commencement of operations.

Office hours restrictions are common. NOR tendered at 1730 on a Friday, where the charter specifies office hours tendering only (0800 to 1700), is typically deemed tendered at 0800 Monday. That gap can represent 60+ hours of waiting at the shipowner’s risk.

How laytime is fixed

The allowed laytime can be expressed in three ways under LAYTIMEDEFS 2013 Article 1 and general practice.

Definite laytime is a fixed number of days, hours, or hours-and-minutes. “3 weather working days SHEX” is definite; the clock runs as defined regardless of how fast the port or the cargo operates.

Calculable laytime is determined by a formula applied to a known quantity. “Loading at 8,000 tonnes per weather working day” gives allowed laytime only once the bill-of-lading quantity is known. For a 48,000 tonne cargo at 8,000 t/WWDSHEX, allowed laytime at load = 6 WWD. The laytime used calculator computes both the allowed and used figures.

Customary despatch means the vessel must be loaded as fast as the custom of the port permits. The charterer is not bound to a particular rate; the obligation is to use the port’s customary resources. Customary despatch laytime is much harder to pin down, and disputes over what “customary” means at a given port are common in LMAA arbitration.

The cargo quantity used to compute calculable laytime is normally the bill-of-lading quantity, not the surveyed quantity or the cargo manifest. Where outturn differs from B/L quantity by more than a small tolerance, the charter party typically specifies which figure governs.

The laytime clock: counting and exceptions

Running days and weather working days

LAYTIMEDEFS 2013 Article 4 defines the main counting units.

A “day” is a period of 24 consecutive hours. A “working day” is a day on which work is normally carried out at the port, but a “working day” excludes official holidays (whether or not work is actually done on that day). A “weather working day” (WWD) is a working day on which weather conditions, and if applicable tidal conditions, permit the relevant cargo operations for a continuous period of not less than the number of hours specified in the charter party (or, if none, continuously throughout the day). If weather or tidal conditions prevent operations for part of a day only, a proportion of that day counts.

“Running days” count every day including Sundays, holidays, and bad-weather days. Running days are the hardest measure for the charterer; they’re the rarest in practice but appear in some tanker forms and in fertiliser and salt charters where the cargo is weatherproof.

The practical difference is large. In tropical ports with 20-25% rainfall during the wet season, shifting from WWD to running days can cut allowed laytime by 20-25%. That’s the difference between a vessel saving despatch and running up demurrage on the same cargo operations.

SHEX, SHINC, FHEX, and FHINC

LAYTIMEDEFS 2013 Articles 4 and 5 define the holiday exception terms.

SHEX (Sundays and Holidays EXcepted): Sundays and official holidays at the port do not count against laytime regardless of whether work is done. If the vessel works on Sunday, the time worked is not counted but nor is it on the shipowner’s account. The charterer simply gets that time as a bonus.

SHINC (Sundays and Holidays INcluded): Sundays and holidays count in full. The tanker trades and several bulk routes use SHINC because terminals operate continuously. Under SHINC, if the terminal doesn’t work Sunday due to a breakdown, the time still counts, but the delay may be an “excepted peril” under the charter party.

FHEX (Fridays and Holidays EXcepted): used in some Middle East charters where Friday is the day of rest.

FHINC (Fridays and Holidays INcluded): Friday counts.

SHEX UU (unless used): an important variant. Sundays and holidays are excepted unless cargo operations continue; if the vessel actually works on Sunday, those hours count as used laytime. This prevents the situation where a charterer holds back operations until Monday to avoid consuming laytime. SHEX EIU (even if used) is the converse: Sunday time never counts, even if operations continue.

The “unless used” variant is the current market norm for most dry cargo charters.

Excepted periods and interruptions

Beyond the SHEX/SHINC framework, charter parties list specific events that stop the laytime clock. Common exceptions include:

Weather interruptions: when rain, wind, or sea conditions stop cargo operations, the elapsed time doesn’t count under a WWD charter. The port agent records the interruption start and end times in the Statement of Facts. Disputed weather interruptions (was it really raining hard enough to stop operations, or did the stevedores call off early?) are the most frequent single subject of LMAA arbitrations.

Equipment failure: the allocation depends on whose equipment failed. Terminal crane failure is generally on the charterer’s account. Ship’s gear failure is on the shipowner’s account. The charter party normally specifies this, but gaps are common and give rise to disputes.

Strike: most charter parties except strikes from laytime, but only when the strike directly prevents cargo operations. A strike at a different terminal in the same port doesn’t help if the vessel’s own terminal is working.

Shifting between berths: time spent moving from the anchorage to the berth, or from one berth to another within the port, is sometimes excepted, sometimes not. LAYTIMEDEFS 2013 Article 14 defines “shifting time” as time used in moving from one position to another within a port, and provides that it counts as laytime unless the charter party excepts it.

Lock, sluice, and tidal delays: at tidal ports, the vessel may have to wait for a tide window. The charter party typically treats tidal delays as neither counted nor excepted, meaning they count as laytime; the specific provisions vary.

Laytime under the GENCON 2022 SHEX clause: an example

Consider a Supramax loading 50,000 tonnes of grain at Novorossiysk under GENCON 2022. The charter specifies: loading rate 8,000 MTPDSHEX (metric tonnes per day, SHEX), with 6-hour turn time after NOR. The vessel arrives Saturday at 14:00, anchors at the waiting berth, and tenders NOR at 14:30 on Saturday.

Because NOR is tendered outside office hours (the standard port office hours are 08:00 to 17:00 weekdays), NOR is deemed tendered at 08:00 Monday. The 6-hour turn time starts at 08:00 Monday; laytime starts at 14:00 Monday.

Allowed laytime: 50,000 / 8,000 = 6.25 WWDSHEX. Loading commences at 16:00 Monday. On Wednesday there is heavy rain from 10:00 to 14:00 (4 hours). The cargo is not loaded on Sunday (SHEX).

Laytime calculation:

• Monday 14:00 to 24:00 = 10 hours counting
• Tuesday = 24 hours counting
• Wednesday 00:00 to 10:00 = 10 hours; 10:00 to 14:00 = 4 hours weather (NOT counted); 14:00 to 24:00 = 10 hours counting = 20 hours Wednesday
• Saturday (half working if that applies in the specific CP), Sunday = SHEX, excluded

If loading finishes Wednesday at 22:00, total laytime used = (10 + 24 + 20) hours = 54 hours = 2.25 days. Allowed = 6.25 days. Substantial despatch is earned.

The demurrage and despatch calculator and weather working day calculator perform these computations directly from port event data.

Reversible and non-reversible laytime

When the charter covers both a load port and a discharge port, the charter party must specify whether laytime at the two ports is aggregated or counted separately. The full treatment is in the companion article on reversible laytime and despatch; the key distinctions for this context are as follows.

Non-reversible laytime is the default where the charter is silent. Each port has its own laytime allowance. Demurrage at one port cannot be offset by despatch at the other. This is the pro-shipowner position: if the vessel loses two days at load (on demurrage) but saves three days at discharge (on despatch), the charterer pays two days’ demurrage and does not recover three days’ despatch.

Reversible laytime pools the allowances. The charter typically says “laytime to be reversible between loading and discharging.” Both allowed laytime amounts are added together; total time used at both ports is subtracted. If the net is positive, the charterer pays demurrage; if negative, the charterer earns despatch. For the same example: total allowed = say 10 days; total used = 7 days (load) + 5 days (discharge) = 12 days; demurrage for 2 days.

All-purposes laytime is a single laytime block covering all operations under the charter. It’s common in short-voyage trades where ports are close and separating load from discharge is impractical.

Average laytime applies to multi-port charters. The allowed laytime per port is averaged across all loading or all discharging ports for the purpose of any single-port calculation.

LAYTIMEDEFS 2013 Article 7 defines “reversible laytime” as: the option given to the charterer to add together the time allowed for loading and discharging. Article 8 defines “non-reversible laytime” as: separate time allowed for loading and discharging which cannot be exchanged for each other.

The reversible laytime calculator and multi-port reversible laytime calculator compute these aggregations.

The laytime formula

The fundamental laytime equation is:

In practice “Total” is the elapsed clock time from NOR to cargo completion; “Turn time” is any contractual notice period deducted at the start; and “Excepted” is the running sum of SHEX periods, weather interruptions, equipment-failure exceptions, and other contractually excluded events as recorded in the Statement of Facts. The laytime used calculator implements this calculation step by step.

Once on demurrage, always on demurrage

Once laytime expires, the vessel enters the demurrage period. The principle that time exceptions stop applying once demurrage has started is one of the most significant rules in charterparty law. It is known commercially as “once on demurrage, always on demurrage.”

The rule is not a common law rule; it is a contractual rule, and its application depends on the exact charter party wording. In The Dias [1978] 2 Lloyd’s Rep 325, the Court of Appeal confirmed that under standard dry cargo charter forms with the rule expressly stated, SHEX and weather exceptions did not stop the demurrage clock. The court emphasized that once the laytime allowance is exhausted, the charterer has had their entire contractual time; continuing exceptions would allow the charterer to extend the effective free time indefinitely in bad weather or at congested ports.

The consequence is that a vessel on demurrage accrues at the full demurrage rate even through Sundays, holidays, and weather days that would have been free during the laytime period. For a Capesize at USD 35,000/day demurrage, two Sundays and four weather days during a prolonged discharge delay represent 6 days or USD 210,000 in demurrage that would have been zero cost if the vessel had been within laytime.

Some charter parties carve back exceptions during demurrage. Shellvoy 6 and BPVOY 5 both preserve weather exceptions during the demurrage period for tanker operations, reflecting the fact that adverse weather genuinely prevents tanker terminal operations and the risk allocation intended by SHEX should not flip simply because one port went slowly. This variation is important: the shipowner who assumes “once on demurrage, always on demurrage” applies without checking the specific form may lose arbitration.

LAYTIMEDEFS 2013 Article 10 codifies the rule: “Once the vessel is on demurrage, no exceptions to laytime shall apply unless the charter party expressly provides to the contrary.”

The Statement of Facts and the time sheet

The Statement of Facts (SoF) is the evidentiary backbone of every laytime claim. A full treatment is in the companion article on the Statement of Facts; this section covers the interface with laytime calculation.

The SoF records every material port event with a time-stamp: vessel at anchorage, NOR tendered, NOR accepted (or objected to), vessel at berth, hatch boards removed, loading commenced, rain started, rain cleared, loading resumed, loading completed, vessel sailed. The agent typically uses a standard form (BIMCO’s Laytime Statement of Facts form is widely used) and entries are made in real time, not reconstructed after the fact.

Both sides sign the SoF. The master signs on behalf of the shipowner; the shipper’s or receiver’s representative signs on behalf of the cargo side. Signing does not create an estoppel; a signed SoF can be contested at arbitration if the facts recorded are wrong. But a signed SoF that is not challenged promptly carries considerable evidential weight.

From the SoF, the laytime clerk constructs the time sheet: a tabular calculation that translates the SoF events into counted and excepted time, aggregates the counts, compares against allowed laytime, and states the demurrage or despatch balance. The Statement of Facts builder automates this process from event inputs.

Common SoF disputes

Weather disputes are the most frequent. The SoF shows rain from 14:35 to 16:10; the charterer’s surveyor says it was drizzle that didn’t stop operations; the shipowner says it stopped grain loading for the full 95 minutes. The LMAA arbitrator will look at the master’s deck log, the port meteorological records, and any independent weather service data.

NOR disputes arise when NOR is challenged as invalid: the vessel wasn’t ready, the holds weren’t clean, the paperwork wasn’t in order. An NOR subsequently found invalid means laytime started later, which can shift the demurrage calculation materially.

Equipment attribution: crane breakdown at 09:15, resumed at 13:00. Whose crane? If the terminal’s, the time is on the charterer’s account and counts. If the vessel’s derrick, it depends on the charter party language but is often on the shipowner’s account and doesn’t count. The SoF typically just records “crane breakdown”; the attribution dispute is separate.

Demurrage rates, time bars, and the claim cycle

Once the demurrage calculation shows a balance due, the shipowner’s team constructs the formal demurrage claim. The claim must be submitted within the contractual time bar, typically 90 days from completion of discharge where the fixture imposes one. Tanker forms such as Shellvoy carry the bar in the printed text; dry-cargo printed forms such as GENCON mostly do not, and the bar arrives by rider. Some clauses specify 60 days. Missing the time bar is fatal: the claim is extinguished, not merely delayed. The demurrage time bar calculator computes the deadline from the discharge completion date.

Typical 2024 market demurrage rates, which reflect the cost basis for these time bar calculations:

These rates are negotiated fixtures, not published tariffs; they move with the freight market and differ by trade and region. Demurrage earned across an active fleet can represent 5-15% of total voyage revenue.

Despatch is typically half the demurrage rate (“half despatch” is the market standard). Some charter parties distinguish “despatch on all time saved” (DATS) from “despatch on working time saved” (DWTS). Under DATS, the charterer earns despatch for all laytime allowance unused, including SHEX time that would never have counted anyway. Under DWTS, only actual working time saved generates despatch. DATS is more pro-charterer; DWTS is more pro-shipowner. The despatch ATS vs AWTS calculator quantifies the difference.

Laytime and NOR in multi-port charters

Where a voyage calls at multiple load or discharge ports, the laytime mechanics multiply. Separate NOR must be tendered at each port; the SoF is maintained at each port separately. The aggregate laytime calculation then depends on whether the charter is reversible, non-reversible, or all-purposes.

The Adventure [2001] EWHC 230 (Comm) confirmed that under a multi-port charter where laytime is specified per berth per day, separate allowed laytime at each berth must be compared against separate used laytime at that berth, not aggregated across berths. That holding is specific to the “per berth per day” formulation; different wording produces different results.

Under a reversible multi-port charter, the multi-port reversible laytime calculator aggregates allowed and used laytime across all ports and produces the net demurrage or despatch figure.

Laytime under ASBATANKVOY in practice

Asbatankvoy Clause 6 is the standard NOR and laytime provision for US tanker fixtures. It reads (in relevant part): “Upon arrival at customary anchorage at each port of loading or discharge, the Master or his agent shall give the Charterer or his agent notice by letter, telegraph, wireless or telephone that the vessel is ready to load or discharge cargo, berth or no berth, and laytime… shall commence upon the expiration of six (6) hours after receipt of such notice…”

The words “berth or no berth” are Asbatankvoy’s version of WIBON. In The Laura Prima [1982] 1 Lloyd’s Rep 1, the Asbatankvoy charterer argued that “berth or no berth” applied only where the berth was unavailable due to the berth being occupied, not where the vessel couldn’t get in because of weather. The House of Lords rejected the distinction: the clause covers any situation where the vessel is at the waiting anchorage and ready, regardless of why the berth can’t be reached.

Asbatankvoy operates on running hours (not weather working days) for tanker laytime, with explicit exceptions for time lost due to breakdown of the vessel’s loading or discharging equipment. This means tanker laytime disputes focus on equipment attribution rather than weather.

Laytime in the context of voyage charter economics

The full voyage charter framework is in the companion article on voyage charter party. For laytime context, the key relationships are:

Freight vs demurrage: freight is the per-tonne payment for the voyage; demurrage is additional per-day compensation for port detention. In bullish freight markets, demurrage rates rise (owners can demand more per day because the opportunity cost of idling is higher). In weak freight markets, demurrage rates fall.

Port selection and laytime: charterers choose ports partly on their laytime track record. A port with chronic congestion and slow equipment is a demurrage liability even at efficient shipping rates. Pre-charter port analysis considers average vessel turnaround times, typical weather delays, stevedore efficiency, and NOR acceptance practices.

Laytime and the “laytime clause”: in a typical voyage charter negotiation, the laytime clause is among the most heavily negotiated provisions alongside freight rate and payment terms. Points negotiated include: the counting basis (WWD vs running days), SHEX vs SHINC, the turn time, WIBON vs berth charter, the reversibility, and the demurrage rate. Each of these points has a directional commercial effect that experienced brokers and lawyers track explicitly.

Comparison of laytime term types

The table below summarizes the main laytime qualification terms and their commercial effect:

The SHEX SHINC time exclusion calculator applies any of these qualification combinations to raw elapsed hours.

Relationship to despatch

Despatch is the mirror of demurrage: the charterer’s entitlement when operations complete inside the allowed laytime. The reversible laytime and despatch article covers despatch fully. For this article the key points are:

Despatch is at the shipowner’s cost. The shipowner got full freight based on the assumption of a normal turnaround; if the charterer turns the ship faster, the shipowner has a net profit on the port-time assumption, and despatch returns part of that to the charterer. The conventional “half despatch” means despatch accrues at half the demurrage rate, so the upside to the charterer is smaller than the downside risk.

Despatch is not automatic; the charterer must claim it, typically within the same time bar that applies to demurrage claims. Missing the despatch claim deadline is less commercially catastrophic than missing a demurrage time bar (despatch amounts are smaller), but the principle is the same.

Some charter parties don’t provide for despatch at all. This is uncommon in dry cargo but appears in certain commodity-specific forms and in COA (contract of affreightment) terms where despatch at one voyage might create perverse incentives across the series.

Laytime and the Notice of Readiness: the GENCON 2022 tightening

GENCON 2022 rewrote the NOR provisions compared to GENCON 1994. The 1994 form’s NOR clause had accumulated a body of judicial interpretation that parties and brokers found unpredictable. The 2022 revision:

• Makes NOR tendering valid “whether in berth or not, whether in free pratique or not, whether customs cleared or not” without the need to add separate WIBON/WIFPON qualifications.
• Fixes the turn time at 6 hours for both load and discharge, superseding the customary port practice arguments that led to litigation under the 1994 form.
• Adds a re-tendering procedure for invalid NORs: the master may re-tender after remedying the deficiency, and laytime starts from the re-tendering time (not retrospectively).
• Expresses the laytime counting basis as “weather working days SHEX UU” as the default, with the “unless used” variant expressed.

The 2022 changes reduce NOR disputes for GENCON users but don’t affect charters on other forms. Asbatankvoy and the oil-major forms continue to operate under their own NOR regimes, where The Laura Prima and The Mexico 1 remain the leading authorities.

Demurrage as liquidated damages: the no-penalty rule

English law treats demurrage as a pre-agreed measure of the owner’s damages for detention, not as a penalty. The distinction matters because penalties in English contract law can be unenforceable; liquidated damages that represent a genuine pre-estimate of loss are enforceable.

Courts have consistently held that demurrage survives the penalty rule. The owner doesn’t have to prove actual loss; the agreed rate is payable for each day on demurrage regardless of the market rate on the day. This is commercially essential: demurrage disputes would become impossibly expensive if owners had to quantify actual daily opportunity cost rather than claim the agreed rate.

The flipside is that demurrage is the owner’s exclusive remedy for detention during the demurrage period. The owner can’t claim general damages for detention once the vessel is on demurrage, unless the detention is so prolonged as to constitute a repudiatory breach of the charter party. The House of Lords in The Bonde [1991] 1 Lloyd’s Rep 136 confirmed that demurrage exhausts the owner’s claims for ordinary detention. Claims beyond demurrage require proof of repudiation or separate breach.

Laytime disputes and arbitration

The overwhelming majority of laytime disputes are resolved at the LMAA (London Maritime Arbitrators Association), SCMA (Singapore Chamber of Maritime Arbitration), or SMA (Society of Maritime Arbitrators, New York) rather than in court. LMAA alone publishes anonymized summaries of hundreds of awards per year; laytime and demurrage disputes represent 35-45% of LMAA caseload in most years.

Small Claims Procedure is available at LMAA for disputes under GBP 100,000; Intermediate Claims Procedure for disputes under GBP 400,000. These procedures reduce the cost of contesting modest demurrage claims that would be uneconomic under full arbitration. Many shipowners pursue small claims routinely; the cost-benefit calculation favors claim pursuit even for sub-USD 50,000 demurrage amounts.

Key arbitral issues recurring in LMAA awards:

• NOR invalidity (holds not clean, vessel not truly ready, agent tendered outside prescribed hours).
• Weather attribution (rain duration and intensity records, port meteorological records).
• Equipment failure attribution (who owned and operated the failed crane or conveyor).
• Shifting time treatment (inside berth vs outside berth vs customs-driven shifting).
• Holiday designation (local holidays, port holidays, religious observations).
• SHEX UU vs SHEX EIU (did the parties really mean one or the other?).
• Time bar compliance (was the claim properly formulated and submitted within the contractual deadline?).

Laytime documentation best practice

Shipowners and charterers who manage laytime well share certain documentation disciplines:

Port captains and superintendents maintain real-time logs at the port, independent of the agent’s SoF. Discrepancies between the agent SoF and the shipowner’s log are flagged immediately, not discovered six weeks later when the demurrage claim is being built.

NOR acknowledgment in writing: even where the charter allows oral or telephone NOR, a written confirmation sent by email or message system removes any ambiguity about the NOR tender time and the receiving party’s acknowledgment.

Weather records: the master’s deck log records weather conditions independently of the SoF. Cross-referencing with publicly available port meteorological data (most major ports have publicly accessible weather station records) makes weather disputes much easier to resolve without arbitration.

Equipment log: for charters where equipment attribution matters (tanker and grain loading), a separate equipment log noting start and stop times for each piece of equipment, with cause, is stronger evidence than a general SoF entry.

Time bar diarizing: demurrage departments calendar the time bar deadline at the moment the vessel sails from the last discharge port. Missing a time bar by even one day, regardless of the merits of the claim, is fatal.

Limitations

Several aspects of laytime law and practice lie outside the scope of this article.

The English-law framework described here does not apply automatically to charters governed by other legal systems. French maritime law, US maritime law (particularly for the coastal and inland trades), and Chinese maritime law each contain laytime provisions that differ in material ways from English law. Even within English law, the precise outcome in a given dispute depends on the exact charter party wording, and general statements about “market practice” or “standard terms” must be read against the specific form.

LAYTIMEDEFS 2013 applies only where expressly incorporated by reference. Many older charter parties still in circulation incorporate Voylayrules 1993 or no standard definitions at all. The 2013 definitions diverge from Voylayrules 1993 on several points, including the definition of “weather working day” and the treatment of the turn time.

The demurrage rates cited in this article are market ranges for 2024 based on reported fixture data; actual negotiated rates in any specific fixture depend on the freight market, the specific trade, and the bargaining positions of the parties at the time of fixing.

Case law summaries in this article are simplifications. The Laura Prima, The Johanna Oldendorff, The Mexico 1, The Kyzikos, and The Adventure each turned on specific charter party language; the holdings should not be applied to different forms without checking whether the linguistic differences matter.

See also

Related wiki articles:

• Voyage charter party
• Demurrage
• Notice of Readiness
• Statement of Facts
• Reversible laytime and despatch

Related calculators:

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