Dispatch

Despatch money is the mirror image of demurrage in the economics of a voyage charter. Where demurrage is a penalty the charterer pays the owner for using more than the allowed laytime to load or discharge, despatch is a reward the owner pays the charterer for using less. The logic is that if the charterer works the cargo quickly and releases the ship early, the owner benefits from having the vessel available sooner for its next employment, and the charter provides for the charterer to share in that benefit through a despatch payment for the time saved.

Despatch is agreed in the charter party and is conventionally set at half the demurrage rate, reflecting a rough balance between rewarding fast cargo work and penalising slow work. The amount payable depends on how much time is saved against the laytime allowance, and, as with demurrage, the calculation is carried out after the event using the statement of facts and the laytime statement. A point that often has to be settled in the charter wording is whether despatch is payable on all working time saved or only on the laytime saved, since the two can produce different figures. Not every charter provides for despatch (some fix the freight on the basis that no despatch is payable) but where it applies it is a real incentive for efficient loading and discharging.

Despatch and demurrage together govern the sharing of the time risk in port between owner and charterer, and they are a routine part of the settlement of a voyage. A charterer with efficient terminals and good cargo organisation may regularly earn despatch, while delays turn the same voyage into a demurrage cost. Because the sums can be significant and the calculation depends on the precise wording of the laytime and despatch clauses and on the accuracy of the port records, despatch, like demurrage, is a frequent subject of negotiation and occasional dispute, and understanding it is part of the everyday work of ship operators, brokers and charterers.