Laytime

Despatch vs demurrage, with a worked calculation

Published 12 October 2026

Demurrage and despatch are the two possible results of one laytime calculation. If the charterer takes longer than the laytime allowed (the agreed time for loading or discharging), the charterer pays the owner demurrage. If the cargo work finishes early, the owner pays the charterer despatch, where the fixture (the agreed deal) provides for it. This page puts them side by side and works one port call in both directions.

The two side by side

The definitions are from the Laytime Definitions for Charter Parties 2013, agreed by BIMCO, CMI, FONASBA and the Baltic Exchange.

	Demurrage	Despatch
Definition	"an agreed amount payable to the owner in respect of delay to the Vessel once the Laytime has expired, for which the owner is not responsible"	"an agreed amount payable by the owner if the Vessel completes loading or discharging before the Laytime has expired"
Who pays	Charterer pays owner	Owner pays charterer
When	Laytime used is more than laytime allowed	Laytime used is less than laytime allowed
Rate	A daily rate in the fixture, part days pro rata	By custom half the demurrage rate. Written DHD, demurrage half despatch
Laytime exceptions	Stop applying once laytime has expired, unless the charterparty says otherwise	Decide how much time counts as saved. See the two bases below
Always payable?	Yes, on any fixture with fixed laytime	Only if agreed. A fixture can be free despatch
Broker's commission	Usually due on it	Not due on it

The two rates are not equal because the two events are not equal. A delayed ship loses a day of earnings and the owner cannot get it back. A ship released early gains a day, but only if the owner can use it. Half is the trade's rough price for that difference. It is a custom, not a rule, and the fixture can set any figure.

The fixture used in the example

The figures are round and made up for the arithmetic. They are not a market quote.

CHARTERPARTY
  Cargo           30,000 mt, one load port
  Load rate       5,000 mt per weather working day, SHEX
  Excepted        Sundays, 0000 to 2400
  Demurrage       USD 12,000 per day pro rata
  Despatch        half demurrage, USD 6,000 per day

ALLOWED
  30,000 / 5,000 = 6.000 days                     6d 00h 00m

THE CLOCK
  Laytime commenced           Mon 05 Oct 2026 0800
  Runs Mon 0800 to Sat 2400                       5d 16h 00m
  Sunday 11 Oct excepted
  Runs Mon 12 Oct 0000 to 0800                        8h 00m
  Laytime expires             Mon 12 Oct 2026 0800

Six days of laytime take seven days on the calendar here, because one Sunday falls inside them and does not count. Everything below turns on that one expiry time.

Case A: the ship finishes early

Loading is completed on Thursday 8 October at 2000. No weather stopped work.

  Laytime commenced           Mon 05 Oct 0800
  Completed loading           Thu 08 Oct 2000
  Laytime used                                    3d 12h 00m
  Laytime allowed                                 6d 00h 00m

  Completed                   Thu 08 Oct 2000
  Laytime would have expired  Mon 12 Oct 0800
  Time between the two                            3d 12h 00m
    of which Sunday, excepted                     1d 00h 00m
    of which would have counted                   2d 12h 00m

The ship was released three and a half calendar days before laytime would have run out. But only two and a half of those days were laytime, because the Sunday was never going to count. Which figure is paid depends on the despatch basis.

Basis in the fixture	Time paid for	Despatch at USD 6,000 a day
Working time saved, or laytime saved	2.5 days	USD 15,000
All time saved	3.5 days	USD 21,000

The definitions give both. Despatch on all working time saved, or on all laytime saved, is payable "for the time from the completion of loading or discharging until the expiry of the Laytime excluding any periods excepted from the Laytime". Despatch on all time saved is payable for the same period "including periods excepted from the Laytime".

A quick check for the working time basis: allowed less used. Six days less three and a half days is two and a half days. The all time basis cannot be checked that way. You have to find the expiry time first, which is why the clock is set out above.

USD 6,000

The difference between the two despatch bases in this example. It is one excepted Sunday at the despatch rate. Had the saved period held a weekend under SSHEX, or a holiday, the gap would be wider.

Case B: the ship finishes late

Same fixture, same start. This time loading is completed on Wednesday 14 October at 1400.

  Laytime expired             Mon 12 Oct 0800
  Completed loading           Wed 14 Oct 1400
  On demurrage                                    2d 06h 00m
  2.250 days x USD 12,000                    USD 27,000.00   charterer pays

Nothing is taken out after Monday 0800. Had it rained on the Tuesday, that time would still count. The definitions say demurrage "shall not be subject to exceptions which apply to Laytime unless specifically stated in the Charter Party". The trade calls this once on demurrage, always on demurrage.

That rule is why the two results are not mirror images. Before expiry, the Sunday helped the charterer by stretching six days into seven. After expiry, a Sunday would count against the charterer in full.

The three results together

Loading completed	Result	Days	Amount	Paid by
Thu 8 Oct, 2000	Despatch, working time saved	2.5	USD 15,000	Owner
Thu 8 Oct, 2000	Despatch, all time saved	3.5	USD 21,000	Owner
Wed 14 Oct, 1400	Demurrage	2.25	USD 27,000	Charterer

You can run all three through the free laytime and demurrage calculator. It takes the allowed time, the start, the completion and the excepted time, and prices the difference at the rates you enter.

How the terms are written in a recap

The despatch terms are usually a string of letters in the recap (the written summary of the deal). The expansions below follow the Baltic Exchange glossary.

Short form	In full
DHDATSBE	Demurrage, half despatch, on all time saved, both ends
DHDWTSBE	Demurrage, half despatch, on working time saved, both ends
DHDLTSBE	Demurrage, half despatch, on all laytime saved, both ends
FD or FDES	Free despatch. No despatch is payable

"Both ends" means the load port and the discharge port. A recap that says only "DHD" has left the basis open, and the example above shows what an open basis is worth.

Four points that change the answer

Tankers pay no despatch. The Baltic Exchange guide to tanker chartering puts it plainly: "despatch money is not paid in the tanker industry". Tanker fixtures have demurrage only.
Reversible laytime gives one result, not two. If load and discharge time are added together, there is one calculation for the voyage, and time saved at one port is set against delay at the other at the full demurrage rate. Reversible laytime works that through.
Commission follows the money to the owner. Brokerage is normally due on demurrage, because it is money the owner earns. It is not due on despatch, which the owner pays out. How ship broker commission works covers the clause.
Demurrage claims have a deadline. Most voyage charters bar a demurrage claim that is not presented with its documents within a set period. The time bar is covered in how to calculate laytime and demurrage.

Demurrage should also not be confused with detention, which is a claim for loss that has to be proved. Demurrage vs detention draws that line. This page explains how the terms are defined and normally applied. It is not legal advice.

References

BIMCO, CMI, FONASBA and the Baltic Exchange, Laytime Definitions for Charter Parties 2013, 2013, definitions 30 to 33. fonasba.com
Baltic Exchange, Shipping Glossary, read 12 October 2026. balticexchange.com
Baltic Exchange, Guide to Modern Shipping: Tanker Chartering, read 12 October 2026. balticexchange.com
Baltic Exchange, Guide to Modern Shipping: Chartering Negotiations, section on commission, read 12 October 2026. balticexchange.com
Steamship Mutual, Demurrage time bars, FAQs. steamshipmutual.com

How to calculate laytime and demurrageWhen the clock starts, what stops it, how the demurrage figure is worked out, and why most claims fail on the paperwork, not on whether they were right. Reversible laytime, with a worked exampleOne voyage counted twice, once with separate laytime at each port and once reversible, and where the difference in money comes from. SHINC vs SHEX in laytimeWhether Sundays and holidays count against the charterer, what UU and EIU do to a worked weekend, and one timeline run under each term. Demurrage vs detentionOne is a daily rate agreed before the delay, the other is a loss proved after it. Container shipping uses both words for something else.

Neptune Atlas

Neptune Atlas builds the laytime sheet from the statement of facts recorded against a fixture and prices the result at the rates on that fixture, demurrage or despatch, with the despatch basis kept as a term of the deal. The free laytime calculator on this site does the same arithmetic for one port and needs no account. Every paid plan starts with 7 free days. A card is needed to start them, and cancelling before they end costs nothing.

Try 7 days free Ship chartering software for brokers What each plan includes