Demurrage/Despatch with Delays

Demurrage/despatch conditions can include delay definitions.

If a delay on the shipment matches a delay definition in the demurrage/despatch condition, a percentage of the delay is added to the allowable time before the vessel is on demurrage (VOD). The applicable percentage is specified for each delay definition in the demurrage/despatch condition. Different percentages can be specified for demurrage and despatch.

Calculation of VOD Date and Time with Delays

A demurrage/despatch condition is entered into a contract for a specific port location. The port has a loading rate of 4000 t/hr. The turn time is 3 hours.

For the following examples, a shipment of 48,000 tonnes has two delays:

  1. 3 hours, with an applicable percentage of 80%: 2.4 hours of delay is allowable.
  2. 4 hours, with an applicable percentage of 50%: 2 hours of delay is allowable.
Example 1: No overlap of delays

If the two delays do not overlap, 4.4 hours is added to the basic calculation:

Allowable time = ( Mass / Loading Rate ) + Turn Time + Allowable delay time
Allowable time = ( 48,000 / 4000 ) + 3 + 4.4 = 12 + 3 + 4.4 = 19.4 hours

In reports, the time is often written as hours and minutes: 19h24.

If the Lay Time Commenced event is at midnight:

  • The vessel is on demurrage if the Lay Time Completed event is after 19:24.
  • The vessel is on despatch if the Lay Time Completed event is before 19:24.
Example 2: 1 hour overlap of delays

The applicable percentages are also applied to the overlap time:

  1. 1 hour * 80% = 0.8 hours
  2. 1 hour * 50% = 0.5 hours

MineMarket has three delay overlap methods: Minimum, Maximum and Weighted Average:

  • Minimum

    If the overlap method is Minimum, the second delay's overlap is added because 0.5 is less than 0.8:

    Allowable delay time = Minimum delay overlap + [(Delay #1 - Overlap) * Allowable Percentage] + [(Delay #2 - Overlap) * Allowable Percentage]
    Allowable delay time = 0.5 + [ ( 3 - 1 ) * 80% ] + [ ( 4 - 1 ) * 50% ] = 0.5 + 1.6 + 1.5 = 3.6 hours
    Allowable time = ( 48,000 / 4000 ) + 3 + 3.6 = 12 + 3 + 3.6 = 18.6 hours

    If the Lay Time Commenced event is at midnight:

    • The vessel is on demurrage if the Lay Time Completed event is after 18:36.
    • The vessel is on despatch if the Lay Time Completed event is before 18:36.
  • Maximum

    If the overlap method is Maximum, the first delay's overlap is added because 0.8 is greater than 05:

    Allowable delay time = Maximum delay overlap + [(Delay #1 - Overlap) * Allowable Percentage] + [(Delay #2 - Overlap) * Allowable Percentage]
    Allowable delay time = 0.8 + [ ( 3 - 1 ) * 80% ] + [ ( 4 - 1 ) * 50% ] = 0.8 + 1.6 + 1.5 = 3.9 hours
    Allowable time = ( 48,000 / 4000 ) + 3 + 3.9 = 12 + 3 + 3.9 = 18.9 hours

    If the Lay Time Commenced event is at midnight:

    • The vessel is on demurrage if the Lay Time Completed event is after 18:54.
    • The vessel is on despatch if the Lay Time Completed event is before 18:54.
  • Weighted Average

    If the overlap method is Weighted Average, the overlaps of both delays are averaged:

    Allowable delay time = Weighted average delay overlap + [(Delay #1 - Overlap) * Allowable Percentage] + [(Delay #2 - Overlap) * Allowable Percentage]
    Allowable delay time = ( 0.8 + 0.5 ) / 2 + [ ( 3 - 1 ) * 80% ] + [ ( 4 - 1 ) * 50% ] = 0.65 + 1.6 + 1.5 = 3.75 hours
    Allowable time = ( 48,000 / 4000 ) + 3 + 3.75 = 12 + 3 + 3.75 = 18.75 hours

    If the Lay Time Commenced event is at midnight:

    • The vessel is on demurrage if the Lay Time Completed event is after 18:45.
    • The vessel is on despatch if the Lay Time Completed event is before 18:45.