What Is a Notice of Readiness and When Does Laytime Start?

Under voyage charters, time spent in port translates directly into money between the parties. The charter party allows a set period, laytime, for loading and discharging. If it is exceeded, charterers pay demurrage to owners; under some contracts, if cargo work finishes early, owners pay despatch to charterers.

The starting point of that calculation is usually the NOR, so when, how and to whom it was tendered shapes the laytime statement that follows. Every charter party has its own wording, so what follows describes general concepts; in any real case, the charter party itself governs.

On the generally accepted view, several conditions must be met together for an NOR to be valid. If one of them is missing, the notice may be invalid and laytime may not start.

The conditions most often required are:

Where a ship counts as arrived depends on the type of charter. Under a berth charter, the vessel arrives only on reaching the nominated berth, so time spent waiting for the berth is in principle at owners' risk. Under a port charter, reaching a point within the port where the vessel is at the charterers' disposal may be enough.

The parties often reallocate that risk with standard phrases. The most common abbreviations are:

Commencement of laytime depends on the charter party wording. Many contracts provide for a notice time after the NOR is tendered, with laytime starting once it has expired. The widely used version of the GENCON form, for instance, sets different commencement times depending on whether notice is given before or after noon.

Rider clauses can change these rules. Some contracts provide that if work starts before notice time expires, time counts from the actual commencement of work. Laytime commencement should therefore be read from the standard form and the riders together.

Laytime calculations rely on abbreviations that define which days and hours count. SHINC means Sundays and holidays included; SHEX means they are excepted. Under a weather working day basis, periods when work is prevented by weather do not count.

Once laytime is exceeded, demurrage runs, usually at a daily rate pro rata. The despatch rate is also set by contract and is commonly agreed as a fraction of the demurrage rate, often half. The maxim once on demurrage, always on demurrage is frequently applied unless the contract provides otherwise.

An invalid NOR can mean laytime never starts, or starts later than expected, which may reduce or remove the demurrage owners anticipated. To manage that risk, masters often re-tender notice as conditions change or tender a further NOR without prejudice to earlier ones.

Whether unconditional acceptance of a defective NOR by charterers changes the outcome has been treated differently across legal systems and cases. Where a dispute over NOR or laytime arises, it should be assessed on the charter party wording and with legal advisers.

The master tenders the NOR; the port captain helps make sure the process is properly recorded on behalf of the principal. The port captain independently notes arrival, anchoring and berthing times, whether the holds are ready, and when notice was tendered and accepted.

These records allow a comparison with the statement of facts and the laytime calculation after completion. Karan Gözetim can keep such time records as part of its port captain service from Gemlik, with the scope agreed at the quotation stage.