Relationship between the Calculation of Laytime and Notice of Readiness in the Shipping Industry

Abstract: In recent years, with the development of shipping market, the situation of port congestion is becoming more and more serious. To pass on the risk of time between the two ports, the parties to a voyage charter usually agree that the charterer has a period of laytime available at the loading or discharging port. In practice, the reasonable stipulation of laytime can effectively avoid the occurrence of disputes. Therefore, the author will explore the relationship between the calculation of laytime and Notice of Readiness in combination with the relevant maritime rules.

Keywords: laytime | layday | laytime notice of readiness

I. DEFINITION OF LAYTIME

Laytime is the period of time during which the shipowner shall make the ship fit for loading or discharging and keep the ship in such condition as agreed between the parties to the contract without payment of any charge other than the freight by the charterer.

The Laytime Definitions of Charterparty (1980, hereinafter referred to as the "1980 Definitions") issued jointly by BIMCO, CMI, FONASBA and GCBS in December 1980 in order to reduce disputes arising between the parties to charter parties in practice to define the loading and discharging terms and conditions usually used in practice and to minimize disputes arising under charter parties.

In addition, BIMCO, CMI, FONASBA and the International Association of Dry Cargo Owners (INTERCARGO) jointly drafted a revised version of the 1980 Definitions in 1993, the 1993 Rules for the Interpretation of Laytime in Voyage Charterparty (hereinafter referred to as the "1993 Rules"). In line with the development of shipping practice, the 2013 Definitions of Laytime in Charterparty (hereinafter referred to as the "2013 Definitions") were adopted.

While the above Rules for the Interpretation of Laytime explain definitions and terminology, different versions of the Interpretation of Laytime have different interpretations of the same expression, and the above Rules for the Interpretation of Laytime are folk rules and require special care in their use. Nevertheless, the above Rules for the Interpretation of Charterparty still play a very important role in the practice of charterparty, and have the effect of unifying and standardizing the understanding of the terms of Charterparty.

Let's look at several ways to prescribe laytime:

1. The agreed laydays or L/D Rate. The former means a few days specified, while the latter means how many tons of cargo are to be loaded or discharged by the Vessel pursuant to the Schedule, or on the Hatch Per Day, or on the Hatch Per Day, and determined by dividing the total quantity of cargo by the Laytime Rate.

2. The Parties agree "Customary Quick Dispatch" ("CQD"). Such method is determined according to the speed at which the vessel can load or discharge, and the conditions on which the cargo berth at the port shall provide suitable for loading or discharging the cargo. much consideration is given to the port's characteristics and circumstances.

3. to load and/or unload as fast as the vessel can receive and/or deliver. Such method is determined according to the speed at which the vessel can load or discharge, irrespective of the specific conditions and circumstances on which the cargo berth at the port can provide or load.

Of course, whichever of the above methods is used, the actual laytime can be calculated at the end of the day, but if the term "laytime" is interpreted differently, the result will be completely different. Here are some common expressions about the term "laytime":

1. Day, also known as calendar day, shall mean the number of calendar days elapsed from the commencement of loading and unloading to the completion of loading and unloading, i.e. the total time for loading and unloading. Time during this period, whether it is physically impossible to perform the loading or discharging operation, such as rain, strikes or other circumstances to interfere with the loading or discharging operation, and whether non- working hours such as Sunday or holiday, shall count.

2. The term "running days" or "consecutive days" refers to the number of days next to one day, that is, laytime shall be calculated on a continuous basis without any deduction. It differs from day in that if part of the loading or discharging is carried out on a given day, the "day" shall be counted as a whole day and pro-rata for "consecutive days" (assuming normal working hours at the port are 24 hours, and eight hours of actual working shall be counted as 1/3 of a "consecutive day").

3. Working days (hereinafter referred to as "WD") means the number of days or part of the time during which loading or discharging operations may be carried out at a port, that is, the number of days during which loading or discharging operations may be carried out at a port, if no loading or discharging operations are expressly excluded from the laytime by the charter party and not a holiday, that is, Sunday or statutory holiday. Time used even if loading or discharging operations are actually carried out during extraordinary working hours, such as partial loading or discharging operations on Saturday or Sunday, shall not count as laytime, unless otherwise provided for in the contract.

4. Weather working days (hereinafter referred to as "WWD") means the time during which loading and unloading operations are allowed to be carried out on the basis of working days in addition to being unaffected by the weather. Here "good weather" is for particular cargoes and does not necessarily require a sunny day. For example, loading or discharging of steels on cloudy days is entirely permissible, but not for those cargoes with special requirements for humidity or temperature, and, although sunny days, loading or discharging of powdered bulk cargoes cannot be carried out when the wind is too strong.

In addition, there are a number of other terms, such as weather working days of 24 hours (hereinafter referred to as "WWD of 24 hours") and weather working days of 24 consecutive hours. It is important to note that, in the 1980 Definitions, the 1993 Rules of Interpretation and the 2013 Definitions, have slightly different interpretations of the above terms so that they come to a different result. Therefore, in practice, a specification should be made in the contract on which rules of interpretation should be given; or the definition of a specific term defined by certain rules should be directly incorporated in the charter party in order to avoid unnecessary misunderstandings and contradictions arising in the future.

II.THE RELATIONSHIP BETWEEN COMMENCEMENT OF LAYTIME AND NOTICE OF READINESS

Laws and custom of the port vary from country to country, and generally according to the terms of the charter party, while it is usual to commence over time provided for in the charter party, when it is usual to commence over time after the Master or the shipowner's agent tenders to the charterer or his agent a notice of readiness. For example, Article 6 of the 1994 Jinkang contract (GENCON, 1994) provides that laytime will start from 13: 00 if the notice of readiness is tendered before and including 12: 00 if the notice of readiness is tendered after 12: 00 if the notice of readiness is tendered after 12: 00, it will start from 06: 00 am on the following working day.

(I) Notice of Readiness

As mentioned above, the commencement of laytime is closely related to the time when the notice of readiness is tendered. So what is a notice of readiness? What is the significance of tendering a notice of readiness?

"Notice of Readiness" (hereinafter referred to as "NOR") means a notice in writing from the Master to the Charterer or his agent after arrival at the loading or discharging ports that the Vessel has arrived at the loading or discharging ports and that the necessary holds, machinery, loading machinery and cranes are ready to load or discharge in such a way as to use the vessel's holds, machinery, loading machinery and cranes.

"NOR" means that on the one hand, the Shipowner declares that the Vessel is ready to load or discharge, and that on the other hand, cargo time may start to count as provided in this contract. NOR is required by law in most countries to be tendered at either loading or discharging ports, but conditions vary: For example, four Nordic countries in Scandinavia, and Germany, require delivery of the NOR to be tendered on arrival, but only when the vessel is actually ready to discharge; in Britain, if there are several ports specified in the contract for loading or discharging, the delivery of the NOR is required at the first port of loading, and no redelivery is required at any other port of loading.

(II) NOR is it subject to effective acceptance

After delivery of the NOR, laytime shall normally commence as provided in the Contract only if it is validly accepted by the Charterer. NOR is it acceptable to tender and be accepted unless:

1. The vessel must be a "vessel of arrival".

If a voyage charter is a Port Charter, that is, if the contract stipulates that the vessel must arrive at a specified port, the vessel is deemed to have arrived at the place required by the contract upon arrival at the specified port, whether it is in berth or not. The arrival of the vessel within the administrative area of the port is generally considered to be a vessel of arrival.

If a voyage charter is a Berth Charter, the ship shall arrive only when she arrives at a specific berth named in the charter. Thus, for the purposes of a berth contract, even if the vessel has actually arrived at the administrative area of the port where the berth is located, the vessel is still not considered to be a vessel of arrival.

2. The vessel is in all respects ready to load or discharge.

Ready for loading or discharging in all respects means that the lessor is ready to load or discharge in all respects ready for loading or discharging, from manning the vessel and all rotating parts of the machinery, derricks and other means of loading or discharging in a normal state ready for use at all times, and from keeping the vessel itself in a state ready for loading or discharging.

At present, according to the requirements of various countries for customs clearance and quarantine, in order to speed up the flow of the port, avoid the phenomenon of pressure on vessels and ports and save time, after arrival at the port, the handling of customs clearance formalities or relevant port formalities such as health and quarantine formalities is no longer a precondition for submission to NOR, but the vessel must go through the above relevant formalities concerning customs clearance and quarantine ports before the actual loading or unloading of the goods. Furthermore, the master needs to note that the time of delivery of NOR cannot be advanced or delayed, otherwise the delivery of NOR will be deemed invalid if the vessel is not yet ready in all respects, and the purpose of calculating the laytime as agreed upon in the contract will not be achieved.

III. CONCLUSION

In practice, the lessor and the charterer often struggle over the interests of time in the voyage charter party. The specific laytime agreed upon by both parties in the charter party in advance can effectively avoid disputes in the future. If there is no express stipulation in the contract, both parties should take into account the interests of both parties in a reasonable manner to protect their rights and interests and reduce unnecessary disputes.

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