news Operational riskDecarbonization & energy Charter Party Disputes
Just in time arrival: laytime and demurrage issues May 31, 2022 7 min read It is common ground that the increasing GHG emissions have caused concern in the last years. An option to reduce the emissions could be optimizing shipping operations and the overall transport chain. So, the concept of just in time (JIT) arrival is one of the proposed solutions to the problem, without ignoring the barriers lying in the nature and complexity of this type of maritime adventure, requiring a higher level of co-operation between the parties involved in the trade. R e gulating the vessel’s speed However, under a voyage charter party, the Owners and Charterers have conflicting interests in relation to contractual terms governing the timing of the vessel’s arrival. For example, a delayed arrival may be in the Charterers’ interests when no cargo is available, or the port is congested; waiting costs money. On the other hand, the Owners may order the ship to increase its speed to arrive earlier and within the agreed dates & hours stipulated in the ‘NOR clause’ or ‘laytime clause’, enabling the ‘laytime clock’ to start ticking. Notably, the Owners will consider the port costs, fuel costs, paid hire (if acting as disponent Owners), fuel prices, and other related expenses or factors affecting the commencement of laytime before deciding to vary the ship’s speed. In fact, the ship will not always arrive timely as expected, and Owners (or disponent Owners in the charter chain) will suffer both costs and time on their account (time not to count as laytime or time on demurrage). Practically speaking, the vessel’s time of arrival may be affected by several factors (known or unknown): bad weather, shipping accidents, delays en route at intermediate ports to lift bunkers or receive spare parts or conduct crew changes (primarily due to COVID nowadays), technical or mechanical issues affecting the vessel’s performance (engine damages or defects, hull fouling, etc.), delays to follow a convoy (HR
Just in time arrival: laytime and demurrage issues
Charter Party Disputes
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