Despatch in Shipping: Meaning, Calculation & Examples

Despatch in shipping is the money payable by a shipowner when loading or discharging is completed before the charterer’s allowed laytime has been fully used, provided the charterparty contains an applicable despatch provision.

In simple terms, demurrage compensates owners for excess time, while despatch can reward charterers for saving time.

But the actual calculation is not always as simple as subtracting cargo-completion time from allowed laytime.

The result can depend on whether the charterparty provides for all time saved, all working time saved, separate or reversible laytime, excluded weekends and holidays, weather exceptions, the agreed despatch rate and the exact time at which loading or discharging is considered complete.

That means a relatively small phrase in the charterparty can materially change the final voyage account.

Quick answer: Despatch money is an agreed payment from owners to charterers when cargo operations finish before the allowed laytime expires. The basic formula is qualifying time saved × agreed despatch rate. However, the meaning of “qualifying time saved” depends heavily on whether the fixture provides for all time saved or all working time saved.

What Is Despatch in Shipping?

Despatch, also called despatch money, is an agreed payment made by owners when a vessel completes loading or discharging before the laytime allocated to charterers has expired.

The concept sits on the opposite side of the laytime calculation from demurrage.

If charterers use more than the permitted laytime, demurrage may become payable to owners.

If charterers use less than the permitted laytime and the fixture contains a despatch provision, despatch may become payable by owners.

Result	Time position	Potential payment
Laytime exactly used	Used time = allowed time	Neither demurrage nor despatch
Time exceeded	Used time > allowed time	Demurrage may be payable to owners
Time saved	Used time < allowed time	Despatch may be payable to charterers

The BIMCO Laytime Definitions for Charter Parties 2013 define despatch money as an agreed amount payable by owners where loading or discharging is completed before laytime has expired.

The key word is agreed.

Despatch is not something that should simply be assumed because a vessel completes early. The charterparty must be checked to establish whether despatch is payable, at what rate and on what basis time saved is calculated.

Why Does Despatch Exist?

A voyage charter gives charterers a contractual amount of time in which to perform loading and/or discharging without paying owners anything beyond the agreed freight in respect of that allowed time.

Owners naturally benefit when cargo operations finish earlier than expected.

The vessel becomes available sooner for:

• the sea passage;
• the next cargo;
• the next charter;
• another loading or discharge port;
• bunkering;
• maintenance;
• dry-docking; or
• another commercial commitment.

A despatch clause shares part of that benefit with charterers.

Commercially, it can also encourage efficient cargo handling.

If charterers know that every qualified hour saved creates a financial benefit, there can be an additional incentive to coordinate terminal operations, stevedores, documentation and cargo availability efficiently.

Despatch should therefore be understood as part of the wider economic allocation of port-time risk in a voyage charter.

Despatch vs Demurrage

Demurrage and despatch are related, but they are not mirror images in every respect.

	Demurrage	Despatch
When?	After allowed laytime has been exceeded	When loading/discharging finishes before allowed laytime expires
Who normally pays?	Charterers to owners	Owners to charterers
Rate	Agreed charterparty rate	Agreed despatch rate
Calculation basis	Time beyond allowed laytime	Qualifying time saved
Typical issue	When laytime expired and whether exceptions continue	Whether ATS or AWTS applies

Demurrage is covered in detail in Tide Signal’s Laytime and Demurrage in Shipping guide.

The important point for despatch is that cargo completion before the theoretical expiry of laytime does not by itself tell you the amount payable.

You first need to identify which periods between completion and theoretical laytime expiry qualify as time saved under the charterparty.

Despatch Calculation Formula

The basic despatch calculation is:

Despatch Money = Qualifying Time Saved × Despatch Rate

If the despatch rate is expressed per day:

Despatch = Time Saved in Hours ÷ 24 × Daily Despatch Rate

For example:

• Qualifying time saved: 36 hours
• Despatch rate: USD 10,000 per day

The calculation becomes:

36 ÷ 24 = 1.5 days

1.5 × USD 10,000 = USD 15,000 despatch

That mathematics is straightforward.

The harder question is often how the 36 hours were determined.

Simple Despatch Calculation Example

Consider the fictional bulk carrier M/V Tide Venture.

Fixture item	Assumed term
Cargo	50,000 MT grain
Allowed laytime	5 days
Laytime used	3 days 8 hours
Despatch rate	USD 9,000/day

Allowed laytime:

5 days = 120 hours

Time actually used:

3 days 8 hours = 80 hours

Time saved:

120 − 80 = 40 hours

Convert that into days:

40 ÷ 24 = 1.6667 days

Despatch:

1.6667 × USD 9,000 = approximately USD 15,000

Despatch payable: USD 15,000

This simple example assumes that all 40 hours qualify for payment.

In a real fixture, that assumption must be checked against wording such as “all time saved” or “all working time saved.”

What Is the Despatch Rate?

The despatch rate is negotiated in the charterparty.

It is common to see despatch expressed as a percentage of the demurrage rate, and 50% of the demurrage rate appears in a number of established charterparty forms.

For example, BIMCO’s CEMENTVOY provisions have used despatch at half the demurrage rate where despatch is agreed, while BIMCO’s MUNTAJATCHARTER similarly provides for despatch at 50% of the stated demurrage rate.

However:

Never assume that despatch is automatically half demurrage.

The commercial fixture controls.

A recap might state:

Demurrage: USD 18,000 pdpr
Despatch: half demurrage, all working time saved

That would produce a despatch rate of:

USD 9,000 per day

But another fixture could provide:

Demurrage: USD 18,000/day
Despatch: USD 7,500/day ATS

or:

No despatch.

The laytime calculation should therefore begin with the actual contractual wording, not market habit.

What Does “All Time Saved” Mean?

All Time Saved, often written as ATS, generally produces the more favourable result for charterers.

Under BIMCO’s Laytime Definitions, despatch on all time saved runs from completion of loading or discharging until the point at which the allowed laytime would otherwise have expired, including periods that would have been excepted from laytime.

This is critically important.

Imagine loading finishes immediately before a weekend.

If Saturday and Sunday would ordinarily be excluded from counting as laytime, they may nevertheless form part of the despatch period where the fixture provides for all time saved.

In other words:

ATS focuses on actual elapsed time between completion and theoretical laytime expiry.

That can make the despatch payment significantly larger.

What Does “All Working Time Saved” Mean?

All Working Time Saved, sometimes written as AWTS, takes a narrower approach.

BIMCO’s definitions treat despatch on all working time saved or all laytime saved as the period between completion and theoretical expiry of laytime excluding periods that would have been excepted from laytime.

So if Sunday would not have counted toward laytime, that Sunday generally does not become payable despatch time under an AWTS calculation.

This creates the central despatch distinction:

	All Time Saved	All Working Time Saved
Abbreviation	ATS	AWTS
Excluded periods included?	Yes	No
Potential despatch amount	Usually higher	Usually lower where excepted periods intervene
Typical issue	Identify theoretical laytime expiry	Identify which time would actually have counted as laytime

All Time Saved vs All Working Time Saved

This distinction deserves a full calculation because it can materially change the voyage account.

Assume:

• Allowed laytime: 96 working hours
• Laytime commences: Thursday 08:00
• Loading completes: Saturday 08:00
• Time used before completion: 48 hours
• Sunday 00:00–24:00: excluded from laytime
• Despatch rate: USD 8,000/day

There are therefore:

96 − 48 = 48 hours of unused laytime remaining.

If loading had continued instead of completing, the remaining 48 working hours would run as follows:

• Saturday 08:00 → Sunday 00:00 = 16 counted hours
• Sunday 00:00 → Monday 00:00 = 24 excluded hours
• Monday 00:00 → Tuesday 08:00 = 32 counted hours

The theoretical laytime expiry would therefore be:

Tuesday 08:00.

Calculation A — All Working Time Saved

Only the 48 hours that would have counted as laytime qualify.

48 hours ÷ 24 = 2 days

2 × USD 8,000 = USD 16,000

AWTS despatch = USD 16,000

Calculation B — All Time Saved

Under ATS, the calculation uses the entire elapsed period from completion at Saturday 08:00 until theoretical expiry Tuesday 08:00.

That equals:

72 hours = 3 days

3 × USD 8,000 = USD 24,000

ATS despatch = USD 24,000

The same vessel, same cargo, same port and same completion time therefore produce:

USD 16,000 under AWTS

versus

USD 24,000 under ATS.

That is an USD 8,000 difference created by only a few words in the charterparty.

Advanced Worked Despatch Example

Consider the fictional M/V Tide Atlas, fixed to load 60,000 MT of bulk cargo.

Fixture item	Term
Cargo	60,000 MT
Loading rate	12,000 MT per weather working day
Allowed laytime	5 weather working days
NOR tendered	Monday 10:00
Laytime commences	Monday 16:00
Loading completed	Thursday 04:00
Despatch rate	USD 10,000/day

Five days of allowed laytime equal:

120 hours.

Elapsed counted time between Monday 16:00 and Thursday 04:00:

60 hours.

Assuming there were no weather interruptions or excepted periods during that time:

120 − 60 = 60 hours saved.

Convert to days:

60 ÷ 24 = 2.5 days.

At USD 10,000/day:

2.5 × USD 10,000 = USD 25,000.

Despatch payable = USD 25,000

Now assume instead that an excluded holiday fell between cargo completion and the theoretical expiry of laytime.

The result could change depending on whether the fixture provides for ATS or AWTS.

This is why a correct despatch calculation requires more than:

Allowed laytime − actual duration.

Despatch With Separate Loading and Discharging Laytime

Many voyage charters provide separate allowances for loading and discharge.

For example:

Loading: 3 days
Discharging: 4 days

If the charterparty treats the two operations separately, time saved at loading does not necessarily compensate for excess time at discharge.

Example:

• Loading allowance: 72 hours
• Loading used: 48 hours
• 24 hours saved
• Discharge allowance: 96 hours
• Discharge used: 108 hours
• 12 hours exceeded

Depending on the fixture, the charterer could potentially earn despatch at the loading port while separately becoming liable for demurrage at the discharge port.

The calculations should not automatically be netted against one another unless the contractual structure permits it.

Despatch and Reversible Laytime

Reversible laytime changes the calculation substantially.

BIMCO describes reversible laytime as an option allowing charterers to combine loading and discharging allowances so that the total operates as one overall time allowance.

Suppose:

• Loading allowance: 3 days
• Discharge allowance: 4 days

If laytime is reversible:

Total allowance = 7 days.

Now assume:

• Loading uses 2 days
• Discharge uses 3 days

Total used:

5 days.

Total saved:

7 − 5 = 2 days.

If the despatch rate is USD 8,000/day and the complete two days qualify:

2 × USD 8,000 = USD 16,000 despatch.

The correct result therefore depends on understanding whether laytime is:

• separate;
• reversible; or
• subject to averaging.

Despatch and “To Average Laytime”

To average laytime is another concept that can affect the final result.

Under BIMCO’s Laytime Definitions, separate loading and discharge calculations are made, but time saved in one operation is set against excess time used in the other.

Example:

Loading: 20 hours saved.

Discharging: 8 hours exceeded.

After averaging:

20 − 8 = 12 hours net saved.

Subject to the remaining charterparty provisions, the despatch calculation may then be based on those 12 net hours rather than the original 20 hours saved at loading.

This is another reason why operators should never begin a despatch calculation by looking only at the Statement of Facts.

The charterparty must come first.

Why the Statement of Facts Is Critical to Despatch

A despatch claim is ultimately a time calculation.

The accuracy of that calculation depends heavily on the accuracy of the vessel’s Statement of Facts (SOF).

Relevant entries may include:

• vessel arrival;
• NOR tendered;
• NOR accepted;
• laytime commencement;
• berthing;
• cargo operations commenced;
• rain stoppages;
• equipment breakdowns;
• shifting;
• weekends and holidays;
• cargo operations completed;
• documents completed;
• vessel sailed.

The BIMCO/FONASBA Standard Time Sheet itself includes fields for laytime allowed, time used, time saved/on demurrage, demurrage rate and despatch-money rate.

This demonstrates how closely the Statement of Facts, time sheet and final despatch calculation are connected.

An incorrect completion time or unrecorded interruption can change the final account.

How Notice of Readiness Affects Despatch

The Notice of Readiness is usually associated with when laytime starts.

But that commencement point can also affect the amount of laytime ultimately saved.

If laytime starts later than the operator assumes, more contractual laytime may technically remain when cargo operations are completed.

That can affect despatch.

A particularly interesting illustration appears in Steamship Mutual’s discussion of the Mass Glory dispute, where problems concerning NOR and commencement of laytime created an unusual situation involving claims for both detention and despatch.

See Steamship Mutual — Notice of Readiness, Laytime, Despatch and Late Redelivery.

The wider lesson is simple:

You cannot reliably calculate despatch until you have first established when laytime actually commenced.

That requires checking:

• whether the vessel was an arrived ship;
• whether she was physically and legally ready;
• whether NOR was valid;
• whether WIBON, WIPON, WIFPON or WCCON applied;
• the notice period; and
• the exact laytime commencement clause.

Despatch, SHEX, SHINC and Weather Exceptions

Laytime wording determines which periods would normally count while cargo operations continue.

Common expressions include:

• SHINC — Sundays and Holidays Included;
• SHEX — Sundays and Holidays Excluded;
• WWD — Weather Working Day;
• WWD of 24 consecutive hours;
• unless used;
• unless sooner commenced.

These terms become particularly important when calculating all working time saved.

If Sunday would have been excluded from laytime, it may also be excluded from AWTS despatch.

But under all time saved, that same Sunday may form part of the payable saved period because the calculation includes periods otherwise excepted from laytime.

This creates one of the clearest examples of why the entire laytime clause must be read as one system.

Can Despatch Be Payable When No Laytime Was Used?

Potentially, yes — although the result depends on the exact contractual circumstances.

A useful English-law illustration is discussed by Steamship Mutual in relation to the Mass Glory.

The dispute involved an invalid NOR under a berth charter and an extended waiting period before discharge.

The arbitrators concluded that because laytime had not commenced during that waiting period, none of the allowed laytime had been used for the despatch calculation. That produced an unusual despatch result alongside other claims arising from the delay.

The case demonstrates why:

physical time spent at port and contractual laytime used are not always the same thing.

This is also why despatch calculations should not be performed mechanically from arrival and completion times alone.

Is Despatch Always Half the Demurrage Rate?

No.

Although half-demurrage despatch is common in some voyage-charter forms and fixtures, there is no universal rule that every despatch rate must equal 50% of demurrage.

BIMCO forms provide useful examples of 50% arrangements, but the parties remain free to negotiate another basis.

Possible recap wording may include:

Demurrage USD 20,000 pdpr / Despatch half demurrage ATS

or:

Demurrage USD 20,000 pdpr / Despatch USD 7,500 pdpr AWTS

or simply:

Demurrage USD 20,000 pdpr / No despatch

Always use the fixture rate.

Does Faster Loading Automatically Mean More Despatch?

Not necessarily.

Faster operations usually create more unused laytime, but the final despatch entitlement can still depend on:

• the actual allowed laytime;
• when laytime commenced;
• whether operations were loading or discharge;
• separate versus reversible laytime;
• ATS versus AWTS;
• excepted periods;
• whether an event counts as completion;
• the despatch rate; and
• whether despatch was agreed at all.

Operational efficiency is therefore only one component of the final calculation.

Why Despatch Matters to Owners

Owners normally want cargo operations completed as quickly as possible because vessel time has commercial value.

But despatch creates an interesting trade-off.

Early completion allows the vessel to leave sooner and potentially improve the voyage result, while part of that benefit may need to be paid back to charterers in the form of despatch money.

The commercial team should therefore include potential despatch exposure when estimating voyage economics.

For example:

• Expected voyage gross margin: USD 400,000
• Potential despatch exposure: USD 30,000

If the charterer performs very efficiently, the owner’s final voyage margin may be:

USD 370,000 before other adjustments.

This does not mean despatch is commercially negative in the wider sense. The ship has also gained time that may be valuable on the next employment.

Tide Signal’s Voyage Margin Calculator can help illustrate how port time and voyage expenses affect overall economics.

Why Despatch Matters to Charterers

For charterers, despatch can turn efficient cargo handling into a direct financial benefit.

Consider a charterer that regularly ships bulk commodities and can coordinate:

• cargo readiness;
• stockpile planning;
• terminal windows;
• stevedores;
• shore equipment;
• documentation;
• surveys; and
• port logistics

more efficiently than competitors.

Across a large voyage programme, recurring despatch earnings can become commercially meaningful.

That is why sophisticated charterers treat laytime management not merely as post-voyage administration but as part of voyage optimisation.

Common Despatch Calculation Mistakes

1. Assuming despatch is automatically payable

The charterparty must contain an applicable despatch provision.

2. Automatically using half the demurrage rate

Half demurrage is common in some fixtures, but the actual agreed rate must be checked.

3. Ignoring ATS vs AWTS

This is one of the biggest sources of calculation differences.

4. Counting excluded periods under AWTS

If the charterparty provides for all working time saved, periods that would be excepted from laytime should not automatically be included.

5. Excluding weekends under ATS

Under all time saved, excepted periods between completion and theoretical laytime expiry can still form part of the despatch period.

6. Starting from the wrong laytime commencement point

An incorrect NOR analysis can affect the entire time sheet.

7. Ignoring reversible laytime

Loading and discharge allowances may need to be combined.

8. Ignoring averaging provisions

Time saved at one port may need to be set off against excess time at another.

9. Using the wrong cargo-completion timestamp

The Statement of Facts must identify the relevant completion event accurately.

10. Calculating from elapsed port time instead of contractual time

Laytime is a contractual calculation. Not every hour physically spent at port necessarily counts.

11. Ignoring rider clauses

A recap or rider clause may change the printed form’s despatch wording.

12. Treating despatch as a simple accounting exercise

The calculation can depend on NOR validity, laytime exceptions, port facts and charterparty interpretation.

Despatch Calculation Checklist for Operators

Before finalising a despatch calculation, check the following.

Charterparty

• Is despatch actually payable?
• What is the despatch rate?
• Is the rate fixed or linked to demurrage?
• Is despatch ATS or AWTS?
• Is laytime separate or reversible?
• Is laytime subject to averaging?

Laytime allowance

• How much laytime was contractually allowed?
• Is it stated in days, hours or cargo rate?
• Is the rate per day, per hatch or another basis?

Commencement

• When was NOR tendered?
• Was the NOR valid?
• When did the notice period expire?
• When did laytime actually commence?

Exceptions

• Are Sundays included or excluded?
• Are holidays excluded?
• Does “unless used” apply?
• Were there weather interruptions?
• Were there strikes or other contractual exceptions?

Completion

• What exact time did loading or discharging complete?
• Is the time supported by the Statement of Facts?
• Were there post-completion operations relevant under the charterparty?

Final calculation

• Determine theoretical laytime expiry.
• Determine qualifying saved time.
• Apply ATS or AWTS correctly.
• Convert hours into days pro rata.
• Apply the contractual despatch rate.
• Check loading and discharge calculations separately where required.

Where Despatch Fits in the Voyage-Chartering Sequence

Despatch sits near the end of a chain that begins long before cargo completion:

Charterparty agreed
↓
Laycan fixed
↓
Vessel approaches loading port
↓
WIBON / WIPON / WIFPON / WCCON assessed where relevant
↓
Valid NOR tendered
↓
Notice period expires
↓
Laytime begins
↓
Cargo operations proceed
↓
Statement of Facts records events
↓
Allowed laytime compared with time used
↓
Time exceeded → Demurrage
or
Time saved → Despatch, if contractually payable

This is why despatch should not be studied as an isolated shipping definition.

It is the final financial result of the entire laytime system.

Continue the Tide Signal Chartering Series

• Charterparty in Shipping — the contractual framework behind the voyage fixture.
• Laycan in Shipping — laydays, cancelling date, late arrival and extensions.
• Notice of Readiness in Shipping — when NOR is valid and when laytime starts.
• WIBON, WIPON, WIFPON & WCCON — how arrival position and formalities affect NOR.
• Laytime and Demurrage in Shipping — complete laytime calculation and demurrage guide.
• Statement of Facts in Shipping — why every time entry matters.

Despatch in Shipping: Frequently Asked Questions

What does despatch mean in shipping?

Despatch in shipping is an agreed amount payable by owners when loading or discharging is completed before the charterer’s allowed laytime expires, provided the charterparty contains a despatch provision.

Who pays despatch money?

Despatch is normally payable by the shipowner to the charterer under a voyage charter where the applicable contractual conditions are satisfied.

How is despatch calculated?

The basic calculation is qualifying time saved multiplied by the agreed despatch rate. The precise amount of qualifying time depends on the charterparty, particularly whether despatch is payable on all time saved or all working time saved.

What is the difference between demurrage and despatch?

Demurrage may be payable by charterers when permitted laytime is exceeded. Despatch may be payable by owners when cargo operations finish before permitted laytime expires.

Is despatch always half the demurrage rate?

No. Half the demurrage rate is common in some standard forms and fixtures, but the despatch rate is contractual and must be checked in the actual fixture.

What does ATS mean in despatch?

ATS means All Time Saved. It generally measures elapsed time from cargo completion until theoretical laytime expiry, including periods that would otherwise be excepted from laytime.

What does AWTS mean?

AWTS means All Working Time Saved. It generally excludes periods that would have been excepted from the laytime calculation.

Which is better for charterers: ATS or AWTS?

All Time Saved can produce a larger despatch payment where weekends, holidays or other excepted periods fall between cargo completion and theoretical laytime expiry.

Can Sunday count as despatch?

It can under an All Time Saved provision even if Sunday would have been excluded from laytime. Under All Working Time Saved, an excepted Sunday would generally not qualify.

Can despatch be earned at both loading and discharge ports?

Yes, if the charterparty provides for despatch at both operations and the relevant time is saved. The calculation may differ where laytime is separate, reversible or subject to averaging.

What is reversible laytime?

Reversible laytime allows loading and discharging allowances to be combined into one overall time allowance. Time saved or exceeded is then generally assessed against that combined allowance.

What does “to average laytime” mean?

It means separate calculations are made for loading and discharge, but time saved in one operation can be set off against excess time used in the other.

Does faster cargo handling always create despatch?

No. The charterparty must first provide for despatch, and the calculation depends on allowed laytime, contractual commencement, exceptions and the agreed basis for time saved.

Does an invalid NOR affect despatch?

Potentially yes. NOR can affect when laytime starts, and the commencement point influences how much allowed laytime has been used or remains when cargo operations finish.

What documents are needed to calculate despatch?

The charterparty, fixture recap, rider clauses, Notice of Readiness, Statement of Facts and laytime time sheet are among the most important documents. Port calendars, weather records and supporting notices may also be relevant depending on the calculation.

Is “dispatch” or “despatch” correct in shipping?

Both spellings can appear in general English, but despatch is deeply established in traditional voyage-chartering terminology and is the spelling used in BIMCO’s Laytime Definitions.

Final View

Despatch is much more than the opposite of demurrage.

It is the financial value assigned by the charterparty to unused laytime.

The simple formula is:

Time Saved × Despatch Rate = Despatch Money

But getting the correct time-saved figure requires a full understanding of:

• allowed laytime;
• NOR validity;
• laytime commencement;
• SHEX, SHINC and weather provisions;
• cargo completion time;
• separate, averaged or reversible laytime;
• ATS versus AWTS; and
• the actual despatch clause.

The difference between All Time Saved and All Working Time Saved alone can change the final account by thousands or tens of thousands of dollars.

That is why a professional despatch calculation starts with the charterparty, reconstructs the port chronology from the Statement of Facts and only then applies the mathematics.

Tide Signal view: A despatch claim is not simply a reward for fast cargo operations. It is a contractual valuation of time that the charterer was entitled to use but did not need. The calculation is only as reliable as the NOR analysis, laytime terms and port chronology behind it.

Authoritative Sources and Further Reading

• BIMCO — Laytime Definitions for Charter Parties 2013 — industry definitions covering laytime, demurrage, despatch, all working time saved and all time saved.
• BIMCO — Laytime Definitions PDF — direct reference for the definitions of despatch and time saved.
• BIMCO / FONASBA — Standard Time Sheet — standard industry document used to assist laytime calculations, including time saved and despatch money.
• Steamship Mutual — Notice of Readiness, Laytime, Despatch and Late Redelivery — useful case analysis showing the interaction between NOR, laytime and despatch.
• BIMCO — Cargo Fumigation Clause for Charter Parties 2015 — includes a practical worked laytime example involving time saved and despatch.

This guide provides a general educational, operational and commercial explanation of despatch under voyage charterparties. Actual entitlement and calculation depend on the complete charterparty, fixture recap, incorporated clauses, governing law and voyage facts. It does not constitute legal advice.