Laytime Calculation in Shipping: Worked Time Sheet, Demurrage and Despatch Example

Laytime calculation is where the charterparty and the port record meet. The calculation is not simply a subtraction of hours. The operator must first identify a valid Notice of Readiness, establish when the contractual clock starts, calculate the allowed time, classify every relevant event in the Statement of Facts and then determine whether time remains, demurrage has accrued or despatch is due.

What Is Laytime Calculation in Shipping?

Laytime calculation determines how much of the contractual time allowed for loading or discharging has been used. Once the allowed time is exhausted, further qualifying delay normally moves into demurrage. If cargo operations finish with time still available, despatch may be payable if the charterparty provides for it.

BIMCO’s Laytime Definitions for Charter Parties 2013 define laytime as the agreed period during which the owner makes and keeps the vessel available for loading or discharging without additional payment beyond freight. They separately define Notice of Readiness, demurrage, despatch, weather working days, reversible laytime and other expressions that can change the result of a time sheet.

For the wider commercial framework, Tide Signal’s Types of Charter Parties in Shipping explains why laytime and demurrage are primarily voyage-charter mechanisms, while time charters operate mainly through hire and off-hire.

What You Need Before Starting a Laytime Calculation

A reliable laytime calculation should not be built from memory or from a single email. The operator normally works from a document pack and the actual charterparty wording.

The documentary point is not administrative detail. Steamship Mutual’s discussion of demurrage time bars notes that charterparties may require NORs, SOFs, port logs, time sheets, letters of protest and other supporting records, and that failure to provide the contractually required package can defeat an otherwise valid claim. See its Demurrage Time Bars FAQs.

The Laytime Calculation Sequence: From Charterparty to Final Time Sheet

A professional laytime calculation is easier to audit when it follows a fixed order. Good operators calculate in a fixed order. Jumping straight to rain deductions or demurrage before confirming commencement is one of the easiest ways to produce a polished but wrong time sheet.

1. Read the recap and governing charterparty. Identify the exact laytime wording and any riders that amend the printed form.
2. Establish the allowed laytime. It may be stated as a number of days/hours or derived from a cargo rate.
3. Check the vessel’s arrival and NOR. Confirm place, readiness, timing and method of tender.
4. Apply notice time or commencement wording. Six hours after NOR, next working day, 1400 hours, “unless sooner commenced” or another agreed trigger.
5. Build a chronological time sheet from the SOF. Do not classify an event before checking the clause that governs it.
6. Apply exclusions and inclusions. Weather, Sundays/holidays, shifting, breakdowns and waiting periods are clause-dependent.
7. Identify the exact moment allowed laytime expires. This is the transition point into demurrage.
8. Apply the demurrage or despatch rate. Usually per day or pro rata, as stated in the fixture.
9. Check the supporting documents and time bar. A correct number still needs a contract-compliant claim package.

How to Calculate Allowed Laytime

Sometimes the charterparty gives a fixed allowance, for example “4 weather working days of 24 consecutive hours”. In other fixtures, allowed laytime is derived from the cargo quantity and an agreed loading or discharging rate.

In the worked example:

That looks simple, but the cargo basis itself may need checking. The relevant quantity might be the bill of lading quantity, the nominated quantity or another contractual basis. Short-loading clauses can also affect the calculation.

BIMCO’s GENCON 2022 provides for laytime to be expressed as running days or a cargo rate and incorporates the BIMCO Laytime Definitions 2013 except where inconsistent with the charterparty terms.

When Does Laytime Start?

This is usually the most important question in the calculation. A five-hour error at commencement can become a five-hour error in demurrage.

Most voyage charterparties make commencement conditional on a valid Notice of Readiness. Gard notes that, where a valid NOR is required, an invalid notice may prevent laytime from commencing unless the circumstances support waiver or another contractual route to commencement. See Gard’s analysis of Notice of Readiness and the commencement of laytime.

Tide Signal’s detailed Notice of Readiness in Shipping guide covers arrived-ship status, physical readiness, legal readiness and the distinction between tendering NOR and the later commencement of laytime.

Turn time and “unless sooner commenced”

Assume the fixture says laytime begins six hours after valid NOR, unless sooner commenced. If NOR is validly tendered at 0900, the normal start would be 1500. If cargo operations actually begin at 1330, the “unless sooner commenced” wording can bring forward commencement to 1330 under the BIMCO definition, subject to the wording incorporated into the actual contract.

Do not confuse this with laycan. Laycan defines the agreed arrival/cancelling window. Laytime concerns the time allowed for cargo operations after the relevant contractual trigger.

How to Read the Statement of Facts

The SOF is the factual backbone of the time sheet. It should tell the reader when the vessel arrived, tendered NOR, entered port, anchored, berthed, shifted, started cargo, stopped cargo, resumed cargo, completed operations and sailed, together with relevant weather or operational interruptions.

But the SOF should remain a record of events. It should not silently decide the legal effect of those events.

This separation matters in disputes. Steamship Mutual’s discussion of The Ocean Neptune shows how documentary requirements around SOFs and other supporting records can become central to whether a demurrage claim survives a contractual time bar.

How Weather, SHEX and SHINC Change a Laytime Calculation

In any laytime calculation, there is no universal rule that every stoppage shown in an SOF is deducted from laytime. The charterparty wording governs.

Weather working days

Under BIMCO’s definition of a Weather Working Day of 24 Consecutive Hours, the actual period during which weather interrupts or would have interrupted cargo work is excluded from laytime. Other weather-working formulations can produce different calculations, so the exact words matter.

SHINC and SHEX

SHINC generally means Sundays and holidays are included in laytime. SHEX means the specified Sundays and holidays are excluded, subject to the wording and any qualifier such as “unless used”. The difference can move the expiry of laytime by a full weekend or holiday period.

Shifting

Whether shifting counts depends on the fixture. GENCON 2022 contains specific provisions for shifting in the circumstances it addresses, but rider clauses can alter the position. A time sheet should therefore state the contractual reason for excluding or counting a shift rather than simply marking “shifting — deductible”.

Breakdowns and cargo availability

A shore conveyor breakdown, shortage of trucks or cargo unavailability does not automatically stop laytime. If the charterparty contains no applicable exception, the time may continue to count. Conversely, delay caused by the vessel or an owner-side breach can have a different result.

Worked Laytime Calculation: Full Time Sheet Example

The following example is deliberately specific. It is not intended to state a universal rule for every voyage charter.

Because cargo starts at 1330 — before the normal 1500 expiry of the six-hour notice period — the agreed “unless sooner commenced” wording brings the start of laytime forward to 1330 in this example.

The key operational moment is Friday 1900. That is when the 96 counted hours are exhausted after allowing for the 3.5-hour weather interruption and the 2-hour shift expressly excluded by the hypothetical fixture.

Laytime Calculation Result: How to Calculate Demurrage

Once the allowed laytime has been used, the excess qualifying time is multiplied by the contractual demurrage rate.

For the example:

BIMCO’s Laytime Definitions describe demurrage as an agreed amount payable for delay once laytime has expired and state that laytime exceptions do not automatically apply to demurrage unless the charterparty specifically says they do.

This is the basis of the familiar principle discussed in shipping as “once on demurrage, always on demurrage”, although the actual charterparty and owner-caused delay can alter the result. Steamship Mutual’s discussion of the principle illustrates why it should not be applied mechanically without reading the agreed exceptions.

How Despatch Is Calculated

If cargo operations finish before allowed laytime is exhausted and the charterparty provides for despatch, the owner may owe the charterer an agreed amount for time saved.

BIMCO distinguishes between all working time saved and all time saved. The difference matters because excepted periods can be treated differently in the despatch calculation.

Assume, separately from the main example, that the charterparty provides despatch at half the demurrage rate on all time saved and the vessel finishes with seven hours of laytime remaining:

For a fuller commercial explanation, use Tide Signal’s existing despatch guide alongside the actual fixture wording. The important point in any calculation is to identify whether the clause says all time saved, all working time saved or another basis.

Reversible, Non-Reversible and Averaged Laytime

Loading and discharging time cannot always be calculated in isolation. The charterparty may allow the charterer to combine or set off time between the two ends of the voyage.

BIMCO defines both “to average laytime” and “reversible laytime” separately. That distinction is worth preserving because the words used in the fixture determine the calculation mechanics.

From a Time Sheet to a Demurrage Claim

A laytime calculation is not complete when the spreadsheet produces a dollar figure. The claim must also satisfy any contractual notice and documentation requirements.

Depending on the charterparty, a claim package may require:

• owners’ laytime/demurrage calculation;
• NOR at each relevant port;
• signed Statement of Facts;
• port log or terminal records;
• letters of protest;
• weather evidence;
• cargo or pumping logs where relevant;
• invoice and supporting correspondence;
• submission within the specified contractual time bar.

The Ocean Neptune decision is a useful reminder that documentary compliance can be decisive. Steamship Mutual explains that the claim in that case was affected by failure to meet contractual supporting-document requirements.

The commercial lesson is straightforward: do not wait until day 89 of a 90-day time bar to discover that the terminal never countersigned the SOF.

Common Laytime Calculation Mistakes That Change the Claim

1. Starting the clock at NOR tender rather than contractual commencement.
2. Using an invalid NOR without considering the effect on commencement.
3. Confusing laycan with laytime.
4. Treating every SOF stoppage as an automatic deduction.
5. Ignoring the exact weather-working-day formulation.
6. Applying SHEX or SHINC from memory rather than the fixture wording.
7. Deducting shifting time without a contractual basis.
8. Continuing to apply ordinary laytime exceptions after demurrage has started when the clause does not permit it.
9. Using the wrong cargo quantity to calculate allowed laytime.
10. Forgetting whether laytime is reversible or averaged.
11. Calculating the amount correctly but missing the claim time bar.
12. Submitting an incomplete evidence package.

Operator’s Laytime Calculation Review Checklist

Port time also feeds directly into voyage economics. Tide Signal’s Voyage Estimation in Shipping guide shows why expected port duration affects TCE even before the contractual laytime claim is known. The Voyage Margin Calculator can then be used to test the commercial effect of additional voyage cost.

For a broader view of waiting time outside the pure laytime regime, Tide Signal’s homepage and Operations coverage also connect port delays with voyage margins, scheduling and cargo planning. See Tide Signal for the latest operational and chartering analysis.

Laytime Calculation: Frequently Asked Questions

What is the basic laytime calculation formula?

Where laytime is based on a cargo rate, allowed laytime is cargo quantity divided by the agreed loading or discharging rate. The resulting allowed time is then compared with counted time after applying the charterparty’s commencement rules and exceptions.

When does laytime start after NOR?

It depends on the charterparty. A valid NOR may be followed by six hours’ notice, a specified start time, office-hour provisions or wording such as “unless sooner commenced”. Tendering NOR and starting laytime are separate events.

Does rain always stop laytime?

No. Weather treatment depends on the agreed wording. A weather working day clause may exclude qualifying weather interruption, while running-day wording or a different clause can produce another result.

Does shifting time count as laytime?

It depends on the charterparty and the reason for the shift. The correct treatment must come from the applicable printed and rider clauses, not from a blanket rule.

What happens when allowed laytime expires?

Further qualifying delay normally moves into demurrage at the agreed rate. The exact treatment of later exceptions depends on the charterparty.

How is demurrage calculated?

Excess qualifying time is divided by 24 and multiplied by the agreed daily demurrage rate when the rate is expressed per day and pro rata.

What is despatch?

Despatch is an agreed amount payable by the owner when cargo operations finish before allowed laytime expires, if the charterparty provides for it. The basis may be all time saved, all working time saved or other wording.

What is the difference between SOF and a laytime time sheet?

The Statement of Facts records what happened and when. The laytime time sheet applies the charterparty to those facts and decides which periods count toward allowed time.

What is reversible laytime?

Reversible laytime allows the charterer to combine the time allowed for loading and discharging, subject to the agreed clause, rather than treating each end as completely separate.

Can a demurrage claim fail even if the calculation is correct?

Yes. A claim can be affected by contractual time bars, notice requirements or missing supporting documents. The actual charterparty determines what must be submitted and when.