What is the difference between laytime and despatch in shipping terms?

• A. Laytime is the penalty for late loading; despatch is the time allowed.
• B. Laytime is the period allowed for loading/unloading; despatch is the reward if operations complete within laytime.
• C. Laytime and despatch are the same thing.
• D. Laytime is the time awarded after cargo is delivered; despatch is the time during loading.

Answer: (B)

Laytime is the period allowed in the contract for loading and unloading the cargo. It sets the window during which those operations can take place without extra charges. Despatch is the bonus paid if the operations are completed within that allocated laytime. So, if loading and unloading finish earlier than the laytime expires, the shipowner pays despatch money to the charterer as a reward for efficient performance. If the work runs beyond the laytime, demurrage applies, meaning the charterer would owe the shipowner for the extra time.

Think of laytime as the time budget for handling the cargo, and despatch as the incentive for finishing early within that budget. The other statements mix up what laytime and despatch represent or describe them as something they are not (for example, a penalty for late loading, or the same thing as laytime).