TL;DR: Laytime is the time a voyage charterer is allowed for loading and discharging, agreed in the charter party. Demurrage is what they pay the owner when they exceed it: an agreed daily rate that keeps running until cargo operations finish. Despatch, where agreed, is the reward for finishing early, customarily at half the demurrage rate. The clock starts when the ship arrives, tenders a valid notice of readiness, and any agreed turn time expires. Most disputes are about when the clock started, what interrupted it, and whether the maths is right.
What are laytime and demurrage?
On a voyage charter, the owner's price assumes the ship spends a known time in port. Laytime is that allowance: the agreed period, expressed in days, hours or a loading rate per day, that the charterer may use for cargo operations without extra cost. Demurrage is the liquidated compensation payable when laytime is exceeded: an agreed daily rate, payable day by day, hour by hour, until the ship is free. The old rule captures it: once on demurrage, always on demurrage, meaning the exceptions that pause laytime generally do not pause demurrage.
How laytime is calculated: a worked example
Take a dry bulk fixture: 50,000 tonnes of grain, loading at 10,000 tonnes per weather working day, with demurrage at an agreed daily rate and despatch at half that rate. That gives 5 days of laytime. The vessel tenders notice of readiness Monday 08:00; laytime starts after the agreed turn time, say Monday 14:00:
Had loading finished Saturday 02:00 instead, the charterer would have earned one day of despatch at the customary half rate. The rate terms matter as much as the rate itself: "weather working days" excludes rain; "SHINC/SHEX" includes or excludes Sundays and holidays; each definition moves real money.
When demurrage starts, and what it costs
Demurrage begins the moment laytime expires and runs continuously, weekends, weather and holidays included, until cargo operations complete. Rates follow the vessel's market, and in a strong market a few days on demurrage can rival the port costs of the entire call, which is why demurrage desks exist at every major charterer and why claims are prepared with statement-of-facts precision.
Demurrage vs detention vs despatch
Three terms, regularly confused, allocating different slices of time:
Notice of readiness: where disputes begin
Laytime cannot start until the vessel is an arrived ship and tenders a valid notice of readiness: at the right place (port or berth, as the CP defines), actually ready in all respects, to the right party, in the agreed manner. An invalid NOR can mean laytime never started, which converts a demurrage claim into nothing. The statement of facts, jointly recording every event and interruption, is the evidential backbone of any claim.
Reducing exposure with better voyage data
Laytime is a port-side clock, but exposure to it is set at sea: a ship that arrives before its berth is free burns fuel to wait, while one that arrives just in time converts waiting into cheaper steaming, without touching its laycan. That is the just-in-time arrival logic inside voyage optimisation, and it is why accurate ETAs and verified voyage data have become part of the demurrage conversation between owners and charterers.
The bottom line
Laytime and demurrage are where voyage charters settle the cost of time. The maths is simple; the definitions (weather working days, NOR validity, exceptions) are where the money moves. Get the terms right in the charter party, keep records that survive scrutiny, and manage arrival so the clock works for you rather than against you. Book a demo to see arrival and voyage data that stands up in a laytime statement.
