In the tanker shipping sector, a precise understanding of laytime is not merely a contractual requirement—it is a critical factor in safeguarding profitability and avoiding costly disputes. Even a minor miscalculation can result in substantial demurrage liabilities, strain commercial relationships, and erode margins.
Two key concepts—Reversible Laytime and Average Laytime—are frequently misunderstood. The distinction between these methods determines the degree of flexibility available to the charterer when offsetting delays across multiple ports, and can be the difference between a commercially successful voyage and a significant financial loss.
📘 What Is Laytime?
Laytime refers to the contractually agreed period during which a charterer is permitted to complete loading and discharging operations.
Exceeding Laytime: If operations exceed the allocated time, the shipowner is generally entitled to claim demurrage.
Finishing Early: If operations are completed in less time, the charterer may be entitled to despatch (a reward for time saved), subject to the charterparty terms.
The method of calculating laytime—particularly for multi-port voyages—depends on whether the charterparty stipulates Reversible Laytime or Average Laytime provisions.
⚖️ Reversible Laytime: A Single Flexible Time Pool
Definition:
Reversible laytime aggregates the total laytime allowed for loading and discharging into a single, combined pool. Time saved at one port can be fully applied to offset delays at another.
Example:
Charterparty terms: 24 hours for loading + 24 hours for discharging = 48 hours total (reversible).
Actual performance:
Loading: 30 hours (+6 hours over)
Discharging: 18 hours (–6 hours saved)
Result: 30 + 18 = 48 hours → No demurrage payable
Advantages:
Maximum operational flexibility for the charterer
Particularly suitable for trades with unpredictable port performance
Lower risk of demurrage exposure when operations are unbalanced across ports
⚖️ Average Laytime: Partial Port-by-Port Offset
Definition:
Under Average Laytime, laytime is calculated separately for each port. Overruns and savings can be partially offset, but not to the same extent as under the reversible method.
Example 1 – Balanced Outcome:
Allowed: 24 hours loading + 24 hours discharging
Actual: Loading = 30 hours (+6), Discharging = 18 hours (–6)
Net: +6 and –6 = 0 → No demurrage
Example 2 – Imbalance:
Loading = 30 hours (+6), Discharging = 20 hours (–4)
Net: +6 – 4 = +2 hours → Demurrage payable for 2 hours
Key Difference:
Unlike the reversible approach, average laytime does not permit full offsetting of delays between ports.
🛢️ Why Tanker Charters Prefer Reversible Laytime
Greater Flexibility: Full offsetting between loading and discharging delays
Simplified Risk Management: Focus on total voyage performance rather than per-port timing
Reduced Demurrage Exposure: Particularly valuable when port operations are inconsistent
⚖️ Legal Interpretation of Laytime Clauses
Arbitration panels and courts tend to interpret laytime clauses strictly. Where ambiguities exist, they are frequently resolved in favour of the shipowner. It is therefore in the charterer’s interest to ensure that all laytime provisions are drafted with clarity and consistency to minimise the risk of disputes.
🔍 Final Thoughts: Get Laytime Right—or Pay the Price
Reversible and average laytime may appear to be technical terminology, but they have a direct and material impact on the commercial outcome of every tanker voyage. A carefully negotiated clause can reduce liability, optimise operational efficiency, and save thousands in demurrage costs.
Whether you are a trader, broker, operator, or legal advisor, a sound understanding of these concepts is non-negotiable for success in the tanker market.
If you are regularly engaged in tanker chartering or demurrage disputes, specialist maritime legal advice can help you negotiate clear laytime provisions, analyse complex cases, and draft contracts that effectively manage risk.