Voyage estimate, laytime and a load-port change on a wheat fixture
M/V Iron Meridian, a 30,000 dwt self-trimming bulk carrier, is offered a voyage: 26,000 t of bulk wheat, 4,200 nm from load port to discharge port, freight USD 28.00 per tonne FIOST, 3.75 per cent total commission. Service speed is 13.0 kn; sea consumption 18 t/day; port consumption 2.5 t/day; bunkers priced at USD 620/t delivered. Loading is estimated at 3 days, discharge 4 days, plus 1 day for canal transit and anchorage waiting. Port disbursements are USD 48,000 at loading, USD 62,000 at discharge and USD 35,000 for the canal. The owner's minimum acceptable result for the ship is USD 16,500 per day. The charterer has also asked whether the owner would accept a different load port that adds 600 nm to the sea passage at the same freight rate. The manager wants a decision today, before the vessel finishes her current discharge and before the grain market moves.
1. Carry out a voyage estimate and state whether the fixture should be accepted at USD 28.00/t.
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Voyage estimate
Sea time: 4,200 ÷ 13.0 = 323.1 h = 13.46 days Port time: 3 + 4 + 1 = 8.0 days Total voyage: 21.46 days
Bunkers
- At sea: 13.46 × 18 = 242.3 t
- In port: 8.0 × 2.5 = 20.0 t
- Total: 262.3 t × USD 620 = USD 162,632
Freight
- Gross: 26,000 × 28.00 = USD 728,000
- Commission 3.75% = USD 27,300
- Net freight = USD 700,700
Costs
- Port disbursements: 48,000 + 62,000 + 35,000 = USD 145,000
- Bunkers: USD 162,632
- Total: USD 307,632
Result
- Voyage result: 700,700 − 307,632 = USD 393,068
- Daily result: 393,068 ÷ 21.46 = USD 18,314/day
This is USD 1,814/day above the USD 16,500 minimum, a margin of roughly 11 per cent over the ship's required level. Accept, provided the standard conditions are checked first: holds and hatches suitable for grain, no hold cleaning cost hidden in the fixture, laytime and demurrage terms acceptable, and the laycan workable with the current discharge. A margin of 11 per cent is thin against weather delay or a two-day berth queue, so the laytime and demurrage terms are the real risk, not the freight rate.
2. Laytime is 96 hours SHINC, commencing 6 hours after NOR acceptance; weather working day, rain excepted; demurrage USD 14,000 per day pro rata; despatch half demurrage. NOR was accepted 0600 Monday, cargo work began 1400 Monday, rain closed hatches 0900–2300 Tuesday, a ship's winch failure stopped work for 3 hours on Wednesday, and cargo completed 1800 Sunday. Calculate demurrage or despatch.
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Laytime clock
- NOR accepted 0600 Monday; laytime commences 6 hours later, at 1200 Monday.
- The 6-hour gap and the period 1200–1400 before cargo work began both count; the ship was on notice and available.
Time to count against laytime
Laytime allowed: 96 h. Weather working day, rain excepted: the 14 h of rain on Tuesday (0900–2300) is deducted. The 3 h winch breakdown is not deducted - it is the ship's own fault and counts as laytime used.
- Laytime allowed: 96 h
- Plus excepted rain: 14 h
- Time to run from 1200 Monday: 96 + 14 = 110 h
110 h = 4 days 14 hours, so laytime expires at 1200 Friday + 14 h = 0200 Saturday.
Demurrage
- Cargo completed 1800 Sunday; time on demurrage = 0200 Saturday to 1800 Sunday = 40 h
- 40 ÷ 24 × 14,000 = USD 23,333 (say USD 23,333 payable by the charterer)
Cross-checks worth stating in the answer
- If the charter party had said laytime commences on commencement of cargo work instead, the clock would start at 1400 Monday and demurrage would reduce by 2 hours, about USD 1,167.
- If the rain had fallen while the ship was already on demurrage, once on demurrage the ship is on demurrage at all times and the exception would generally not apply - a point to check in the charter party.
- If the ship had waited at anchorage, a WIBON/WIPON provision would decide whether the waiting time counted; without it the owner may lose the argument.
- Despatch never arises here; had the ship finished early the owner would pay half demurrage on the saved time.
3. Quantify the freight rate needed to accept the additional 600 nm so that the owner is no worse off per day.
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Extra cost of the longer leg
- Extra sea time: 600 ÷ 13.0 = 46.15 h = 1.923 days
- Extra sea bunkers: 1.923 × 18 = 34.6 t × USD 620 = USD 21,452
- Time value at the current daily result: 1.923 × USD 18,314 = USD 35,218
- Total additional earnings required: 21,452 + 35,218 = USD 56,670
Grossing up for commission and spreading over the cargo
The freight is subject to 3.75 per cent commission, so the owner keeps 96.25 per cent of each freight dollar:
- Additional gross freight required = 56,670 ÷ 0.9625 = USD 58,878
- Per tonne on 26,000 t = 58,878 ÷ 26,000 = USD 2.26/t
Required rate: about USD 30.26/t (say USD 30.30/t), against USD 28.00 offered.
Judgement points
- Do not price the extra leg on cost alone. The vessel's time is worth the daily result she could earn elsewhere, which is why the USD 18,314/day figure is used rather than the owner's USD 16,500 minimum. If the market has softened, the correct time value falls and so does the required rate.
- Check the assumption that the extra 600 nm carries no extra port cost, canal transit or waiting; if the new load port has a berth queue, add the waiting days at the same daily rate.
- Check that the extra distance does not eat the laycan, and that the vessel can still meet the charterer's cancelling date; if not, the true cost is the loss of the fixture, not the fuel.
- Quote the alternative clearly: at USD 28.00/t the owner should decline the load-port change, or accept it only with an adjustment to freight of about USD 2.26/t or equivalent demurrage protection.