A-Z Essential Guide to Laytime and Demurrage

Introduction

Master the A to Z of Chartering Contracts, Laytime and Demurrage. The shipping adventure, sometimes called the carriage of goods by sea involves several stages from the loading voyage, with the vessel sailing in ballast to the loading port, the loading operation, and then the carrying voyage until the unloading or discharging of the cargo. The shipowners and charterers roles and responsibilities in every stage and the interplay between them and how it pans out during the course of a voyage will determine the success or failure of that voyage.  It is important to understand contractual provisions in a charter party and negotiate the terms in order to avoid pitfalls in chartering the ships and to provide for the calculating of laytime and demurrage which will invariably affect all the parties’ bottom line.

This 5-day Ship Chartering, Laytime & Demurrage Masterclass workshop will give participants a comprehensive understanding of the essential aspects of chartering. This training course will enable participants to better negotiate charter parties, have the insight to make strategic decisions on chartering and to be at an advantage when negotiating chartering contracts. The knowledge and expertise gained from this workshop will enable the participants to return to work with many new strategies to apply in practice.

Objectives

By the end of the course, participants will be able to:

• Attain comprehensive and in-depth knowledge of ship charter contracts
• Recognize the differences between the many types of charter parties
• Understand the jargon and abbreviations
• Appreciate the rights and obligations of Charterers and Owners
• Avoiding pitfalls in negotiating chartering contracts
• Manage & Mitigate the risks involved in chartering vessels  

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

The training course is highly recommended for new entrants to the shipping industry, staff in liner shipping companies, chartering and trading companies. It is particularly useful for staff involved in the day to day shipping operations or administration such as:

• Contract Professionals / Negotiators
• Procurement Personnel
• Chartering Personnel
• Legal Advisors / Personnel
• Freight Forwarders
• Shipping Agents
• Marine Insurers
• Legal Advisors
• Finance  

Course Outline

   Day 1: Introduction to Ship Chartering, Laytime & Demurrage

• The basic principles of chartering
• Different types of chartering: time, voyage, and bareboat
• Understanding Shipowners and Charterers roles, rights, and obligations
• Common Contract & Commercial terms of charter parties
• Examples of charter parties used in different trades
• Understanding shipping trade “jargon”
• Understand what is laytime, demurrage, and despatch
• Case Studies Reviewed
• Roleplay – Negotiating a Voyage Charter Party

   Day 2: Defining Laytime

• Legal and operational issue: the laytime
• All possibilities and remedies are undertaken
• The types of laytime
• The complications that may occur in the commencement of laytime
• What can be considered as an exception for laytime commencement
• Review of Recent Caselaw

   Day 3: Calculating Laytime

• How to interpret “Laytime Definitions 2013” and charter party clauses
• The commencement of laytime
• How to assess the duration or laytime
• The cessation of laytime
• How to estimate the demurrage/despatch earned
• How to recognize fundamental differences between dry cargo and tanker laytime
• How to make a laytime calculation of multiple charters
• Reviewing and analyzing case studies

   Day 4: Defining Demurrage, Detention, and Despatch

• The fundamental contract law relating to demurrage, damages of detention, despatch, and dead freight
• How to determine the rate of demurrage in dry cargo and liquid cargo trades
• The liability of charterers for demurrage
• How to assess the termination of demurrage periods
• How to determine the rate of despatch in dry cargo trades
• The responsibility of the charterer to load full and complete cargo
• The effect of dead freight on demurrage
• The content and rationale of past cases of English Common Law
• How to estimate the demurrage/despatch earned
• Practical differences in the despatch calculation
• Practical differences between normal, reversible, and average laytime

    Day 5: Calculating Demurrage

• How to define laytime and demurrage
• How to perform demurrage calculation both for dry and wet charters
• The consequence of the incorrect choice of wording in drafting charter party clauses regarding demurrage
• The importance of diversified interpretation of terms agreed
• The differentiation in claims resulting from such interpretation
• Analyzing charter party clauses and documents required for calculations