How to Calculate Laytime

Calculating laytime means comparing the time allowed under the charter party with the time used in the Statement of Facts. Here is the step-by-step method, with the demurrage formula and a worked example.

Laytime is the time a charterer is allowed to load and discharge before demurrage starts. Calculating it means comparing the time allowed under the charter party with the time actually used, as recorded in the Statement of Facts. Here is the sequence.

1. Find the allowed laytime

The charter party states laytime one of two ways. Fixed: a set number of hours or days (e.g. 72 running hours). Rate-based: a cargo rate, where allowed laytime = cargo quantity ÷ the rate. For example, 30,000 MT at 450 MT/hour = 66.7 hours. Note whether load and discharge are reversible (pooled) or counted separately.

2. Establish when laytime commences

Laytime usually starts a set period after a valid Notice of Readiness is tendered — the turn time (e.g. 6 hours), or on berthing, depending on the clause (WIBON, WIPON and similar let the clock start even before berth). Getting the commencement moment right is where many disputes begin.

3. Count the time used

From commencement, count elapsed time to the completion of cargo operations, using the SOF timeline. Whether weekends and holidays count depends on the terms — SHINC (they count) versus SHEX (they don't).

4. Deduct excepted periods

Not all elapsed time counts against the charterer. Common deductions include:

• Bad weather stopping cargo work (under weather-working-day terms)
• Inward passage and shifting between berths
• Breakdowns or stoppages on the owner's or terminal's account
• Time recorded in a Letter of Protest as the terminal's responsibility

Subtracting these from the elapsed time gives the net laytime used.

5. Compare, and price the difference

If net laytime used is less than allowed, the vessel finished early — despatch may be due. If it is more, the excess is time on demurrage, priced at the daily demurrage rate:

Example: 14.4 hours over the allowance at USD 24,000/day = 14.4 ÷ 24 × 24,000 = USD 14,400.

A note on multi-port and reversible voyages

On a reversible parcel voyage the allowance is applied once across the pooled load and discharge time — not summed port by port. Mixing these up is one of the most common calculation errors, and it can move the result by tens of thousands of dollars.