A vessel finishes loading late but discharges early. Does the faster discharge cancel the loading overrun? The answer depends on how the charterparty connects the two laytime allowances.
This distinction can change the amount payable even when everyone agrees on the hours used. The examples below isolate that question: should loading and discharge be calculated separately, or against one combined allowance?
Start with the agreed calculation method
Non-reversible laytime keeps the loading and discharge allowances separate. An unused discharge allowance is not automatically available to cover excess loading time. Each operation produces its own time balance and, where the contract provides for it, its own financial result.
Reversible laytime allows the loading and discharge allowances to be combined. Under the terminology in BIMCO’s Laytime Definitions for Charter Parties 2013, definitions 23–24, reversal is an option for the charterer; averaging instead involves separate calculations followed by setting saved time against excess time. Check the fixture for any election requirements and the operations covered.
These definitions are intended for contractual incorporation, not universal application. Read the recap, printed form, rider clauses and applicable definitions together. The governing law also matters when wording or entitlement is disputed.
Worked comparison: the same voyage, two outcomes
Assume the parties have agreed the following hypothetical terms:
- Loading allowance: 48 running hours.
- Discharge allowance: 72 running hours.
- Counted loading time: 60 hours.
- Counted discharge time: 48 hours.
- Demurrage: USD 12,000 per 24-hour day, pro rata.
- Despatch: expressly agreed at USD 6,000 per 24-hour day, pro rata, on working time saved.
For this example, commencement is agreed, every relevant hour counts, and there are no weather deductions, holidays, interruptions, owner-caused delays or other exceptions. Transit between ports is outside these counted periods. We change only whether the allowances are separate or reversible.
| Operation | Allowed | Used | Balance |
|---|---|---|---|
| Loading | 48 hours | 60 hours | 12 hours excess |
| Discharge | 72 hours | 48 hours | 24 hours saved |
| Combined | 120 hours | 108 hours | 12 hours saved |
Example 1: non-reversible laytime
Calculate loading first. The vessel uses 60 hours against a 48-hour allowance, leaving 12 hours on demurrage.
Loading demurrage = 12 ÷ 24 × USD 12,000 = USD 6,000.
Next calculate discharge independently. The vessel uses 48 hours against a 72-hour allowance, saving 24 hours.
Discharge despatch = 24 ÷ 24 × USD 6,000 = USD 6,000.
The account therefore records USD 6,000 demurrage payable by charterers and USD 6,000 despatch payable by owners. Although the figures are equal, do not simply report “nothing payable.” They are separate calculated amounts. Whether and when they can be financially set off depends on the contract and applicable law; equality alone does not authorize withholding payment.
Example 2: reversible laytime
Assume the reversible arrangement applies and any required option has been properly exercised. Add the allowances before determining the final balance:
Total allowed = 48 + 72 = 120 hours.
Total used = 60 + 48 = 108 hours.
Time saved = 120 − 108 = 12 hours.
The loading operation uses more than its original allocation, but the combined allowance is not exhausted. Under our assumptions there is no demurrage, and the remaining 12 hours generate despatch:
Despatch = 12 ÷ 24 × USD 6,000 = USD 3,000 payable by owners.
This is a different result from two separate USD 6,000 amounts. Pooling works in hours before applying the appropriate rate. It is not achieved by calculating separate money claims and subtracting them.
What changes if discharge takes longer?
Keep every assumption the same but increase counted discharge time to 84 hours. With separate accounts, loading exceeds its allowance by 12 hours and discharge exceeds its allowance by another 12 hours.
Separate demurrage = (12 + 12) ÷ 24 × USD 12,000 = USD 12,000.
With reversible laytime, total use becomes 60 + 84 = 144 hours against 120 allowed.
Reversible demurrage = (144 − 120) ÷ 24 × USD 12,000 = USD 12,000.
Here the methods produce the same total because neither operation saves time and the demurrage rate is identical. Reversible wording does not guarantee a lower claim.
Why averaging needs a separate check
Do not treat “to average” as an instruction to average the two daily rates or divide total hours by two. It concerns the relationship between time balances.
In a simple example without exceptions, averaging and reversal may produce the same arithmetic. That does not make the clauses interchangeable in every fixture. Where exceptions or the point of demurrage commencement affect counted time, prepare the calculations required by the actual wording rather than substituting a preferred method.
Check the time records before pooling
A combined allowance cannot repair an incorrect commencement time. Steamship Mutual’s notice-of-readiness guidance explains that a valid notice is usually the initial trigger for time to run, subject to the remaining charterparty requirements.
Our examples deliberately avoid interruptions. Real calculations also need to distinguish laytime exceptions from demurrage exceptions. Gard’s Guidance on Maritime Claims and Insurance, chapter 4 cautions that suspending laytime does not, by itself, suspend a demurrage clock already running.
For an event-by-event method, see our Statement of Facts to laytime worked example. Establish the counted intervals first, then apply the agreed relationship between loading and discharge.
Pre-submission checklist
- Identify separate, reversible or averaging wording.
- Confirm the covered ports and any required election.
- Verify commencement and completion against supporting records.
- Apply each relevant counting rule before totaling hours.
- Check despatch entitlement, rate and time-saved basis.
- Show time balances separately from payment and set-off treatment.
Frequently asked questions
Is despatch always half the demurrage rate?
No. The examples expressly agree that relationship. Do not insert a despatch payment or a half-rate assumption unless the contract provides for it.
Does reversible laytime include the sea passage?
Combining allowances does not itself make passage time count. Establish the counted periods under the charterparty.
Can I pool hours because it seems fairer?
No. Use the agreed method. A spreadsheet should document the bargain, not replace it.
This article provides general educational examples, not legal advice. Actual entitlement depends on the complete charterparty, facts and governing law.
