The fixture
The calculation
Still needs a cargo quantity and a rate per day, and when laytime commenced and completed.
Runs entirely in your browser. Nothing you type is sent to Neptune Atlas or stored anywhere.
How laytime and demurrage are calculated
Laytime is the time the charterer is allowed for loading and discharging. Demurrage is what they pay when they exceed it, and despatch is what the owner pays back when they beat it. The arithmetic is four numbers in order, and it is never what a claim turns on.
1. How much laytime was allowed
Divide the cargo quantity by the charterparty rate. 31,800 tonnes at 6,000 tonnes per weather working day is 5.3 days. The quantity in that division is the quantity actually loaded, taken from the bill of lading, not the figure written into the charterparty: on a cargo described as 30,000 tonnes with a ten per cent option, the difference is nearly nine hours of laytime.
2. When the clock starts
Laytime commences a stated period after a valid notice of readiness is tendered, commonly twelve hours. The notice has to be valid to start anything, which is where a surprising number of claims are lost before the arithmetic begins.
3. What stops the clock
Weather, excepted periods such as SHEX, breakdowns, and shifting, each according to the terms fixed. Put the total in the excluded field for that port. Once the ship is on demurrage the exceptions generally stop running, on the principle that once on demurrage, always on demurrage.
4. The difference, priced
Allowed minus used. Positive is despatch, negative is demurrage. Multiply by the daily rate, pro rata for part days. The rate is per day, not per hour, and getting that wrong by a factor of twenty-four is the classic error, because the answer still looks like money.
What this calculator does not do
It takes the two ends of each port call and a total for excluded time. A real claim is built the other way round, from the statement of facts: a timed list of every event from arrival to completion, where an interval counts only if the event that opened it counts, and a stoppage with no reason recorded against it is a gap rather than an exclusion. That distinction is what a counterparty argues about, and it is not something a page of six boxes can do for you.
Questions
- How do you calculate demurrage?
- Subtract allowed laytime from the time actually used, then multiply the excess by the demurrage rate. The rate is quoted per day, so an excess of 2.32 days at USD 14,500 per day is USD 33,672.22. Part days are paid pro rata.
- What is the difference between demurrage and despatch?
- Demurrage is paid by the charterer when loading or discharging takes longer than the laytime allowed. Despatch is paid back by the owner when it takes less. Despatch is conventionally half the demurrage rate, but what the fixture says is what applies.
- What does reversible laytime mean?
- The load and discharge allowances are pooled into one, so time saved at the first port pays for time lost at the second and only the net is priced. On separate laytime each port stands on its own, and the same voyage can owe demurrage at one and earn despatch at the other at the same time.
- Which cargo quantity should I use?
- The quantity actually loaded, from the bill of lading, not the figure in the charterparty. A cargo fixed at 30,000 tonnes with an owner's option that loads 31,800 earns laytime on 31,800.
- Is this calculator free?
- Yes, and there is no account and no limit. It runs in your browser, so nothing you type is sent to Neptune Atlas or stored anywhere.
- How accurate is it?
- It uses the same arithmetic as the Neptune Atlas desk, and an automated check asserts on every build that it reproduces the worked example published in our laytime guide, down to the cent. What it cannot do is rebuild the time used from a statement of facts, which is where real claims are decided.
The full guide, with a worked calculation and where claims are actually lost
Neptune Atlas builds the used figure from the statement of facts itself, each event timestamped and each stoppage carrying its reason, so the demurrage line falls out of the timeline instead of a spreadsheet. See what it costs. There is also a free time charter equivalent calculator and a free IMO number checker.