Calculating Time Allowed and Demurrage

In this video we will discuss time allowed in a lay time calculation.

In this example, I already have a late time used calculated.

The first thing you'll need to do is determine whether or not your lay time allowed is reversible.

If so, then you need to decide if that reversibility applies to any operation or if it's specific to loads or discharges.

Any is the default and tends to be the standard For increased flexibility, there are three different places where late time allowed can be entered within the system.

There's the claim level late time allowed, of if reversible is toggled will apply to all of the ports.

If you toggle reversible off, you don't have this claim level late time allowed available anymore.

You need to enter it into each specific port.

Click into the box and click on Edit to see the port call.

Here you see another lay time allowed box.

This lay time allowed is port specific by definition.

It does not carry over to other ports.

You can also set a time allowed based off of an operational rate per hour and cargo quantities.

Let's say I have 1,000 barrels an hour written in my contract.

It will automatically calculate a time allowed for each cargo on the port call.

This will keep the same reversibility if this is toggled on.

Now, in this case, I can see I have six days on the claim level plus the operational time that I've added.

So it's increased up to eight days and seven hours.

We also have an option to view late time distribution cumulatively or with equal distribution.

Cumulative is the industry standard.

It shows the total time allowed at the top and you have a running balance to give you your final time.

At the end, equal distribution will result in the same final number, but it will give you the same amount per port so the balance within the port calls will change.

Now we'll talk about how to calculate demurrage from that allowed lay time and lay time balance.

There are a couple of specific demurrage settings that you need to set properly to do the calculation.

If you just have one standard demurrage rate, you simply put it in the rate box.

If you have escalating rates, you need to toggle off reversible and add the rates here.

Generally, these escalating rates tend to be for dry cargoes which tend not to be reversible.

Here you can see I have $10,000 $10,000 per day for the first day and maybe it's 15,000 after that.

You can set these in increments of days so it doesn't need to be a full number.

Maybe it's one and a half days and after that one and a half days it increases.

To remove a bin, just hit the trash can, You can also set prorated demurrage rates if you are a partial load on the vessel.

If your contract is written that you pay 75% of the total demurrage rate, you can enter that here and add a comment that will show up on the statement.

Now only that 75% or 7,500 per day will be applied to the calculation.

You can also add despatch whether or not you have reversible, but that tends to be for dry cargoes which tend not to be reversible.

And you can either default the rate to the same as the demerge, you can change this to anything, or you can set it as a percent of demerge.

If it's 50% of demerge, you can just hit that toggle.

We have time rounding settings which can be common for TTB barges in Europe.

The default will be exact, which means your lay time used is rounded to the minute, which is what the SOF states.

You can also round it up or down to the nearest hour.

If we round up and we look at this load.

Say I use 28 hours and 11 minutes.

You can see the time used is actually rounded to that 29 hours.

It's rounded up.

If I instead round down, I can see that 28 hours and 11 minutes is rounded down to 28 hours.

In barge claims, you have the options to set a full rate and a barge only rate.

In this example, we'll say the full rate is $500 an hour and the barge only is $100 an hour.

If you go into the lay time calculation of a port call, you can actually set specific additions as full or barge or even a custom rate entirely.

Let's say this adds at the full rate and this is the barge only, and back to the full rate once again.

You'll then see your calculated demurrage is based off of a combination of these two rates, not necessarily just one rate.

In this total use time, it will be the 8 hours and 47 minutes plus the 41 minutes at the full rate, and it will be 3 hours and 24 minutes at the barge rate.