Despatch. Just as “demurrage” was money paid by the charterer as compensation for breach of the-warranty of laytime, so also “despatch” represents money payable, in this case by the shipowner, if the ship completes loading or discharging before the laytime has expired. The owner may have to pay despatch to the charterer or other persons using the vessel, such as shippers or cargo receivers.
However, while demurrage is compensation, despatch is more in the nature of a “reward” or “rebate of freight” for releasing the vessel earlier than may have been expected. In Navico v. Vrontados Naftiki, 1968, it was said that “ . . . the shipowner . . . reaps the advantage of being able to proceed earlier on the ship’s next freight earning engagement. In recognition of this advantage, provision is usually made for the payment by the Owners of a rebate of freight at a daily rate for all time saved”.
The phrase “all time saved” can cause problems, in a descriptive sense, for owners, compared with “all working time saved” and this will be briefly explained below.
Another problem can arise, this time in a rather practical sense, for example, when the charterers agree to a good freight rate for a voyage charter and then the shipowners or their brokers, not realising the implications, agree on a low cargo handling rate. When the vessel arrives at the port at which, cargo operations are under the control of the charterers, the loading or discharging can be carried out faster than was originally agreed by the parties and despatch becomes payable, thus reducing the effect of the supposedly good freight rate.
Another problem of interpretation can arise if the clause dealing with despatch and demurrage is not carefully drafted. For example, a clause may state “Any hours saved in loading to be added to the hours allowed for discharging” and time is saved at the loading and discharging ports. If loading takes three days less than the allowed laytime and discharging takes seven days less than the laytime allowed, it is likely that the charterers will claim for 10 days’ despatch. However, the owners may allow only seven days because the clause does not provide for despatch payable for the time saved at the loading port, only for a method of dealing with the time saved.
It is common for despatch rates to be half the demurrage rates, although an express clause in the charterparty can cause the despatch to be at another proportional rate. The reason for the half-demurrage rate is that despite the earlier release of the vessel, the owner may be unable to fix it easily on its next voyage charter. The owner can gain less by the earlier release than he can lose by delay, which incurs demurrage.
It is also common in tanker voyage charters for no despatch to be mentioned in the charterparty.
Despatch is also relevant to the charterer’s use of the option to average or reverse laytime. For example, if the cargo operation at one port is likely to be slower than agreed and faster at another port, the charterer may exercise his option to average so as to set off the time lost at the slower port against the time saved at the faster port. If the charterer wishes to exercise the option, he cannot claim despatch at the loading port because he should not be allowed to use the same time again at the discharging port.
Despatch can sometimes become payable (twice) for the same time saved. For example, if the vessel is to load at two ports, the loading operations are much faster than agreed and the passage between the two ports is very short. In this situation the time saved may overlap.
Despatch is usually calculated separately for loading and discharging ports but, unless the despatch rates differ for different loading ports and different discharging ports, not for individual loading ports or discharging ports.