Category Archives: Ship Chartering

Minimize Demurrage: Dry Bulk & Tanker Chartering Guide Demurrage & Despatch: How to Minimize Port Costs in Dry Bulk & Tanker Chartering In the volatile world of international logistics, the freight rate is only half the story. For traders and charterers in the dry bulk and tanker markets, the real profit killer often lurks in the port: Demurrage. Whether you are moving 50,000 tons of steel coils or a cargo of clean petroleum products (CPP), an unexpected delay at the discharge port can turn a profitable fixture into a loss. At Borachart, we believe that expert ship chartering services go beyond just fixing a vessel—it’s about protecting your bottom line from start to finish. In this guide, our operations team breaks down the essentials of laytime calculation and shares proven strategies to minimize demurrage costs and maximize despatch. 1. Demurrage vs. Despatch: Knowing the Difference Before you can save money, you must understand the clock you are racing against. Demurrage: The financial penalty paid by the charterer to the shipowner when cargo operations take longer than the agreed laytime. In today’s market, daily demurrage rates for a Supramax or Aframax vessel can easily run into tens of thousands of dollars. Despatch (Dispatch): The reward paid by the shipowner to the charterer for completing operations faster than the agreed time. (Note: This is common in dry bulk chartering but rare in the tanker market). The Goal: Your broker should always aim to negotiate terms that make Despatch possible and Demurrage unlikely. 2. Key Clauses to Negotiate in Your Charter Party Preventing demurrage starts long before the ship arrives at the port. It starts with the Charter Party agreement. A generic contract can leave you exposed to risks you can’t control. For Dry Bulk Charterers: SHINC vs. SHEX: Pay attention to the weekend terms. SHINC (Sundays/Holidays Included): The clock never stops. Great for owners, risky for charterers. SHEX (Sundays/Holidays Excluded): The clock pauses on weekends. This is essential if you are fixing steel products or grain cargoes in ports that don’t work 24/7. Weather Working Days (WWD): Ensure your laytime doesn’t count when rain stops the cranes. This is vital for sensitive cargoes like grain or cement. For Tanker Charterers: Pumping Warranties: In tanker chartering, the ship must be able to discharge cargo at a guaranteed pressure (e.g., 100 PSI). If the ship has a weak pump and delays the discharge, you should not pay demurrage for that time. Cleaning Clauses: Ensure the Notice of Readiness (NOR) is only valid after the tanks pass inspection. You shouldn’t pay for the time the crew spends cleaning dirty tanks. 3. The Importance of Post-Fixture Operations Once the ship is fixed, the “Operations” phase begins. This is where Borachart’s team of 15 supporting staff shines. Active post-fixture management is the best defense against inflated claims. Monitor the Statement of Facts (SOF): This document is the “bible” of the port call. If the crane broke down for 4 hours, it must be recorded in the SOF. If it’s not written down, you will likely pay for it. Validate the Notice of Readiness (NOR): Did the captain tender the NOR before he was actually inside the port limits? If so, the clock shouldn’t start yet. Our team checks every timestamp to ensure you aren’t billed for invalid time. 4. How Borachart Protects Your Interests With over 40 years of history and 1,200 vessel fixtures annually, Borachart has the data and experience to foresee port congestion before it happens. We alert you to port congestion in the Mediterranean or Black Sea weeks in advance, allowing you to adjust your laycan. If a shipowner submits a hefty demurrage claim, we don’t just forward the invoice. We analyze the logbooks, weather reports, and charter party terms to fight for every penny on your behalf. Conclusion In ship chartering, time literally is money. Don’t let inefficient port calls erode your trading margins. By partnering with a brokerage house that understands the technical nuances of laytime and demurrage, you ensure that your cargo moves efficiently and your costs stay predictable. Ready to fix your next cargo? Work with a team that watches the clock for you. Contact Borachart’s Chartering Desk Today