Voyage & Commercial Management

Every commercial decision in port traces back to one document: the charterparty. It fixes who is paying for the voyage, and that in turn decides what the master is entitled — and not entitled — to commit the owner to. A voyage charter sells the charterer a cargo movement between two ports. The owner runs and pays for the ship exactly as normal — bunkers, port dues, canal transits, crew — and earns freight, either a lumpsum or a rate per tonne carried. The owner's profit depends on how efficiently the voyage is run, so time in port matters directly to the owner's pocket, which is why laytime and demurrage exist: they are the owner's compensation when the charterer's cargo operations eat into that efficiency.

A time charter hires the ship, fully crewed and maintained, for a period rather than a voyage. The charterer directs where the ship goes and what cargo it carries, and pays hire — a daily rate — for as long as the ship is at their disposal, plus bunkers and the port costs the voyages incur. The owner's income is now largely fixed by the hire rate rather than by how quickly cargo is worked, so the commercial pressure in port shifts: it is the charterer, not the owner, who loses money from slow cargo operations, and the master's instructions on where to go and what to load come from the charterer within the terms of the charter.

A bareboat (demise) charter goes a step further and hands over the ship itself: the charterer supplies the crew, pays all running costs, and operates the vessel as if they owned it, with the owner reduced to a financing and title-holding role. It is rare for the master personally, but worth recognising, because it changes who the master's employer actually is.

The notice of readiness (NOR) is the document that starts the laytime clock, but only if it is valid, and validity has three separate legs that all have to be true at once. The ship must be arrived — at the berth, or at the place the charterparty nominates as the point of arrival, which for a port charterparty is usually anywhere within the port's legal limits or a customary waiting area. It must be ready in all respects: holds clean and inspected for the intended cargo, cargo gear tested and available, and the administrative side of readiness in place too — free pratique granted, customs and immigration cleared, any certificates the terminal requires produced. And it must be tendered in the way and at the time the charterparty specifies — often only during stated office hours, and often only in writing to a named recipient.

Miss any one of those three legs and the NOR is invalid. An invalid NOR does not start laytime, and it does not become valid later by itself — the master has to re-tender once the missing condition is actually satisfied, and laytime runs from that later, valid tender (subject to whatever turn time the charterparty then allows). This is one of the most common ways an owner loses laytime it should have had: tendering NOR the moment the anchor is down, before holds are actually clean or before free pratique has come through, hands the charterer free days that a correctly timed tender would not have given away.

Most charterparties also build in a short gap — a turn time, commonly a few hours — between a valid tender and the actual start of the laytime count, to give the charterer a reasonable chance to organise stevedores and berth access. That gap is a contractual allowance, not a formality to be skipped, and it has to be read from the charterparty rather than assumed.

The statement of facts (SOF) is the chronological ledger of everything that happens in port — berthing, NOR tendered and accepted, hatches opened, cargo work started and stopped, weather, breakdowns, waiting for a berth, customs and surveyor visits, completion. Every laytime calculation is built entirely from what this document says, which makes it, practically speaking, more important than any verbal account of how the port call actually went. If it is not on the SOF, it will not be counted.

The starting point of the arithmetic is straightforward: laytime allowed is the cargo quantity divided by the agreed rate of work.

What complicates it is which periods count against that allowance and which do not, and that is set entirely by the charterparty's own definitions — not by common sense. A "weather working day" clause excludes time genuinely lost to weather from laytime used. "SHEX" (Sundays and holidays excepted) removes those calendar days from the count altogether, worked or not; "SHINC" (Sundays and holidays included) counts them regardless. A breakdown of ship's gear, waiting for a berth when one was available, or shifting between berths, are each allocated to owner's or charterer's time according to the specific clause that covers them — there is no universal default, so the applicable clause has to be identified before the hours can be sorted.

The master's job is to keep the SOF accurate and to sign it with the correct reservations — noting disputed times or entries the master does not agree with — rather than signing it blank or unread to move things along. A clean signature on a disputed SOF can be treated later as the ship's agreement to every line in it.

Once laytime used exceeds laytime allowed, the vessel is on demurrage: the charterer pays the owner an agreed daily rate, usually pro rata for part days, as liquidated damages for the extra time the ship was tied up in port. It is compensation fixed in advance by the charterparty, not a claim the owner has to separately prove was a loss — that is the whole point of agreeing a rate per day up front.

Many charterparties also apply a general principle that once the vessel is on demurrage, the exceptions that protected the charterer during laytime — weather, Sundays, and so on — stop suspending the clock unless the clause says otherwise; demurrage, once running, tends to run continuously. That is a matter of the specific wording each time, but it is worth being alert to, because it means a delay that would have been free during laytime can still cost the charterer once the allowance has already been used up.

The opposite case is despatch: the owner pays the charterer for laytime saved, when cargo work finishes inside the allowance. Despatch is usually — though again, only by what the charterparty actually says — set at half the demurrage rate, on the reasoning that the owner's saving from an early departure is real but smaller than the loss a late one causes. Whether despatch is even payable, and on what basis it is measured, depends on the clause; not every charterparty offers it.

Bunkering is both a commercial event and, if it goes wrong, potentially a legal one, and the two disputes it produces — quantity and quality — are checked in different ways. On quantity, the ship's own figure is what counts, not the barge's. Tank soundings or ullages, read before and after the transfer, are corrected for trim, list, temperature and density using the ship's calibration tables to give a true quantity received — this is the ship's position, independent of whatever the bunker delivery note (BDN) claims. Any material discrepancy between the ship's corrected figure and the BDN figure needs to be raised before the BDN is signed: noted on the document itself, not argued about afterwards once the ship has sailed and the evidence is gone.

On quality, a representative sample is drawn continuously at the manifold throughout the transfer, split, sealed in the presence of the barge's representative, and signed by both sides. Under MARPOL Annex VI this retained sample is what a fuel-quality dispute is decided against — not a sample from the barge's own tanks, and not a laboratory result on fuel that was never actually sampled at the point of transfer. The ship keeps its sealed sample for a defined period after delivery, in case an off-specification result only surfaces once the fuel has been used.

In both cases the common thread is contemporaneous evidence. A discrepancy noted on the BDN at the time, a sample sealed and witnessed during the transfer, and a letter of protest issued the same day the problem is found, are all worth far more than an accurate recollection given weeks later — by which point the barge, the samples and the other side's version of events have all moved on.

• Barge figures — a starting point for comparison, never the accepted quantity by default.
• MARPOL sample — drawn at the manifold, sealed and signed by both parties, retained by the ship.
• Letter of protest — raised the same day, addressed through the agent, copied to owners.

The ship's agent is appointed to handle the practical business of the port call on the owner's or charterer's behalf, depending on who appoints and pays them: berthing arrangements, customs and immigration formalities, husbandry matters like crew changes and stores, and usually the collection and distribution of documents such as the SOF and NOR. A good agent makes the port call run smoothly, but appointing one does not transfer any of the master's own responsibility for what happens on board, and it does not widen what the master is personally authorised to agree to.

The master has real authority to act for the owner, but it is bounded by the ordinary business of running the ship and by genuine necessity — arranging repairs needed to keep the vessel seaworthy, taking on stores or bunkers needed to complete the voyage, or acting to protect the ship, crew or cargo in an emergency where there is no practical time to consult the company. What that authority does not cover is committing the owner to new commercial terms: agreeing to a change in the charterparty, accepting a cargo claim, signing a letter of indemnity outside the P&I club's normal wording, or promising a shipper or charterer something the charterparty does not already provide for. Those decisions carry financial and legal consequences the master is not positioned to judge in full, and they belong with the company.

In practice this means a short, factual message to the owner or DPA before signing anything unusual costs very little time and closes off most of the risk — silence or a rushed signature under pressure from an agent or charterer closes off nothing.

The three examples below run a full laytime and despatch calculation with a weather exception, a bunker quantity dispute worked from the ship's own soundings, and a laytime calculation complicated by an invalid NOR and a SHEX exclusion — the layered kind of problem this paper actually sets, rather than a single formula substitution.