What is laytime? Regulations on the time of reward and punishment in the charter party

Laytime, also known as shipping time, is an important issue agreed in the charter party. So what exactly is laytime? And how to calculate the loading and unloading cost? Find out carefully these issues through the article below!

What is laytime?

Laytime (loading time or lay days) is also known as loading time. The period of time agreed upon by the two parties in the charter party for the loading and unloading of goods at the port of loading and the port of discharge.

Laytime là gì?

In the charter party, the working time is always clearly defined in order to determine the number of days and hours for loading and unloading. At the same time, it must clearly state which timelines will not be included in the time of goods handling and the time of goods handling. In the case of giving a ready notice and the ship has not yet entered the port, into the bridge, has not yet gone through customs or hygiene procedures, ... then will the time to calculate the cargo handling time be counted?

The rules for laytime

Specifies the number of days for loading or unloading or for both loading and unloading. The "date" unit in laytime has many different types, so it must be specified which data type.
Regulations on loading and unloading cargo: for bulk cargoes, ordinary cargoes will be prescribed loading and unloading rates depending on the loading and unloading capacity of the port, not a specific number of days.
Custom loading and unloading (CQD): in some cases, the contract does not specify the number of days for loading or the rate of loading. That specifies goods are handled according to the customs of the port or in general terms.

Calculation of handling costs

The loading and unloading expenses in the normal charter party will be agreed upon by the two parties in the following ways:

1. Freeloading charges (free in = FI)

As in the freight, the charterer must include the loading and unloading fee, not including the fee for unloading the ship.

Laytime là gì?

When using the Group C (CFR or CIF) sales terms, charterers will choose this method. At this time, the seller is a charterer to ship goods and pay the cost of loading, while the buyer pays the discharge fee.

In this case, the two parties may specify as follows:

If the goods are packed in bags, in boxes, in bulk/rolls, ... then write "free in and stowage" = FI.S = The freight includes loading and unloading expenses.
If it is bulk cargoes, bulk cargoes, not packed or dumped, then write: “Free in and trimming” = FI.T = The freight includes loading and unloading and loading/unloading costs. flat in the deck.

2. Freeloading and unloading costs (Free out = FIO)

That is, in the freight, the charterer must include the cost of loading and unloading of the ship.

Laytime là gì?

When using the sales condition of EXW, the buyer is a charterer and pays the loading and unloading fee. Therefore, buyers often prefer to choose how to charge according to this type.

When using the Group D sales terms, the seller is the charterer and pays the loading and unloading fee. So the seller will also like to choose how to charge this fee.

Regulations on the time of reward and punishment in the charter party

When signing an agreement, the two parties will commit to the time allowed for loading and unloading.

If the charterer proceeds loading and unloading of goods faster than the time specified in the signed contract. The charterer will then be rewarded with a sum of money, called despatch money.

Laytime là gì?

Conversely, if the tenant proceeds to unload goods later than the time specified in the contract. The charterer will then be fined a sum of money, called demurrage.

With the above calculation of loading, unloading, and rewarding expenses. Hope you have gained a lot of useful knowledge. If you are looking for a professional logistics service provider. Contact LEC Group today!

LEC GROUP

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