In a voyage charter the time spent by the vessel at the port is, of particular importance to the owner because the freight is fixed only with reference to the quality of cargo carried and any undue detention during which he continues to incur fixed overhead charges such as depreciation, insurance, interest on invested capital, wages etc. would reduce his calculated profit.
An important clause in the charter party is therefore the one stipulating the maximum time to be allowed for the cargo loading and discharging operations, that is Lay Time.
The provisions of the charter party usually state that lay time is to commence at a specific time after notice of readiness has been given.
The cancelling date is applicable to the loading port only and is the absolute last day under the terms of the charter party on which the charterer is obliged to make use of the vessel.
Lay Time may be expressed as the maximum number of days allowed for loading and discharge or as loading/discharge rate like an example 1500 tons/200 tons per day.
Demurrage is the compensation to which the owner is entitled for detention of a vessel beyond the agreed lay time.
The voyage charter party usually provides for payment of dispatch money to the charterer for the time that is thus saved. In other words, dispatch money is opposite to demurrage and is the compensation payable to the charterer for completing loading and discharging faster than stipulated under the charter party.