Maritime Glossary
Comprehensive definitions of maritime, vessel chartering, and West Africa shipping terms. From vessel types and charter party forms to Nigerian port operations and regulatory terminology.
Last updated: 25 August 2026 | Reviewed by Calmwaters Shipping team
The maritime industry uses specialised terminology that can be confusing for newcomers. This glossary provides clear, practical definitions of key terms used in vessel chartering, port operations, and maritime regulations, with specific relevance to West African shipping.
Whether you are chartering a vessel for the first time, navigating Nigerian customs procedures, or understanding oil and gas terminology, this glossary will help you communicate effectively with shipowners, agents, and regulatory authorities.
Contents
Vessel Types
VLCC (Very Large Crude Carrier)
Oil tanker with 200,000-320,000 DWT capacity, 330-340m LOA. Carries approximately 2 million barrels of crude oil. The workhorse of long-haul crude transportation from West Africa to Europe, Asia, and the Americas.
Suezmax
Oil tanker with 120,000-200,000 DWT capacity, 270-300m LOA. Named after the maximum size that can transit the Suez Canal fully loaded. Carries approximately 1 million barrels. Common on Bonny-Europe routes.
Aframax
Oil tanker with 80,000-120,000 DWT capacity, 220-250m LOA. Named after the Average Freight Rate Assessment (AFRA) system. Used for shorter regional trades in West Africa, including Bonny-Med and Forcados-Europe routes.
MR Tanker (Medium Range)
Product tanker with 40,000-50,000 DWT capacity, 180-200m LOA. Ideal for refined product trades (petrol, diesel, aviation fuel) between Dangote Refinery and regional West African markets.
LR1 (Long Range 1)
Product tanker with 55,000-80,000 DWT capacity, 200-230m LOA. Used for longer product trades from Dangote Refinery to Europe, Americas, and Asia.
LR2 (Long Range 2)
Product tanker with 80,000-120,000 DWT capacity, 220-250m LOA. Larger product tanker for long-haul refined product transportation. Used for Dangote Refinery exports to distant markets.
Handysize
General cargo vessel with 10,000-40,000 DWT capacity, 140-180m LOA. Versatile vessels used for break bulk, general cargo, and minor bulk trades in West Africa.
PSV (Platform Supply Vessel)
Offshore support vessel designed to supply offshore platforms with equipment, fuel, water, and provisions. Typical capacity 2,000-5,000 DWT with large open deck area. Essential for Nigerian offshore oil and gas operations.
AHTS (Anchor Handling Tug Supply)
Multi-purpose offshore vessel combining anchor handling, towing, and supply capabilities. Used for rig moves, anchor handling, and emergency towing. Higher bollard pull (60-300 tonnes) than standard PSVs.
OSV (Offshore Support Vessel)
General term for vessels supporting offshore oil and gas operations, including PSVs, AHTS, crew boats, and dive support vessels. Nigeria's offshore sector operates hundreds of OSVs.
FPSO (Floating Production Storage Offloading)
Floating vessel that processes and stores crude oil from subsea wells until it can be offloaded to shuttle tankers. Widely used in deepwater West African fields including Bonga, Agbami, and Akpo.
FSO (Floating Storage Offloading)
Floating vessel that stores crude oil without processing capabilities. Used as a temporary storage facility before offloading to shuttle tankers. Common in Nigerian offshore fields.
LNG Carrier
Specialised tanker for transporting liquefied natural gas at -162°C. Nigeria is a major LNG exporter, with Bonny Island LNG terminal serving as the primary export facility.
LPG Carrier
Tanker for transporting liquefied petroleum gas (propane, butane). Growing fleet in West Africa due to increased LPG importation and distribution.
Chemical Tanker
Tanker designed to carry chemicals in bulk, with specialised coating and heating systems. Used for chemical imports into Nigerian ports.
Bulk Carrier
Vessel designed to carry dry bulk cargo (grain, cement, coal, fertiliser). Sizes range from Handysize (10,000-40,000 DWT) to Capesize (100,000+ DWT).
General Cargo Vessel
Multi-purpose vessel carrying break bulk, containers, and project cargo. Common in West African trades for construction materials, machinery, and consumer goods.
Crew Boat
Fast vessel designed to transport personnel to and from offshore platforms. Typically carries 20-50 passengers with speeds of 25-35 knots.
Dredger
Vessel used to excavate and maintain navigable channels. Critical for Nigerian ports requiring regular dredging to maintain draft (Calabar, Warri, Onne).
Barge
Flat-bottomed vessel used for transporting cargo on inland waterways and coastal areas. Widely used in Nigerian river ports and for offshore construction.
Capesize
Bulk carrier too large to transit the Suez or Panama Canals, requiring passage around the Cape of Good Hope or Cape Horn. 100,000+ DWT, typically carrying iron ore or coal.
Panamax
Vessel designed to fit through the original Panama Canal locks. Maximum dimensions: 294m LOA, 32.3m beam, 12.04m draft. 60,000-80,000 DWT.
New Panamax (Neopanamax)
Vessel designed to fit through the expanded Panama Canal locks (2016). Maximum dimensions: 366m LOA, 49m beam, 15.2m draft. 100,000-140,000 DWT.
Charter Terms
Charter Party
Contract between a shipowner and charterer for the hire of a vessel or the carriage of goods. The three main types are Voyage Charter, Time Charter, and Bareboat Charter.
Voyage Charter
Vessel hired for a specific voyage from loading port to discharging port. Shipowner provides crew and pays operating costs. Charterer pays freight rate per tonne of cargo. Common for crude oil exports from West Africa.
Time Charter
Vessel hired for a fixed period (typically 6-24 months). Charterer pays hire rate per day and covers voyage costs (fuel, port charges). Shipowner provides crew and maintains vessel. Common for offshore support vessels in Nigerian waters.
Bareboat Charter
Vessel hired without crew or provisions. Charterer assumes full operational control, including crewing, maintenance, and insurance. Used for long-term vessel employment (3-10 years).
COA (Contract of Affreightment)
Agreement to transport a specified quantity of cargo over a defined period, typically with multiple voyages. Provides cargo owners with guaranteed transportation capacity and shipowners with assured employment.
DEMURRAGE
Charge paid by charterer to shipowner when vessel is delayed beyond agreed laytime. Rate specified in charter party, typically per day. Significant in congested West African ports.
DESPATCH
Payment from shipowner to charterer when loading/discharging is completed faster than agreed laytime. Typically half the demurrage rate (despatch half demurrage).
LAYCAN (Laydays Canceling)
Time window during which vessel must present for loading. Layday is earliest arrival date; canceling date is latest. Charterer can cancel if vessel arrives after canceling date.
LAYTIME
Agreed time allowed for loading and discharging operations. Specified in charter party as number of days or hours. Once expired, demurrage begins accruing.
NOR (Notice of Readiness)
Formal notice from vessel's master to charterer stating vessel has arrived and is ready to load or discharge. Triggers start of laytime calculation.
BIMCO
Baltic and International Maritime Council, world's largest shipping association, representing ~60% of global fleet. Produces standard charter party forms (GENCON, SHELLTIME, BARECON).
GENCON
BIMCO standard voyage charter party form. Most widely used voyage charter form worldwide. Provides balanced terms for cargo and tanker trades.
SHELLTIME
BIMCO standard time charter party form for tankers. Used extensively in oil and gas industry, including West African tanker trades.
SUPPLYTIME
BIMCO standard time charter party form for offshore support vessels (PSVs, AHTS). Widely used in Nigerian offshore sector.
BARECON
BIMCO standard bareboat charter party form. Used for long-term vessel hire without crew.
Worldscale
Standardised rate system for calculating tanker freight rates. Routes assigned flat rates; actual rates expressed as percentage (WS 100 = flat rate, WS 120 = 120% of flat rate).
Flat Rate
Worldscale base rate for a specific route, calculated to cover voyage costs including fuel, port charges, and insurance. Updated annually by Worldscale Association.
Freight Rate
Payment for transportation of cargo, expressed per tonne or per voyage. For tankers, often expressed as Worldscale percentage or lump sum.
Hire Rate
Daily payment for time charter or bareboat charter, expressed in USD per day. For West African PSVs, rates typically range from $8,000-25,000/day depending on vessel type and market conditions.
Dead Freight
Penalty charge paid by charterer when less cargo is loaded than the contracted quantity. The shipowner charges for the unused cargo space.
Deviation
Vessel's departure from the agreed route or trading limits. Unjustified deviation can void insurance coverage and give rise to legal claims.
Sub-Charter
Charterer hires vessel from another charterer (instead of directly from shipowner). Creates a chain of contracts, each with its own terms.
COC (Certificate of Compliance)
Certificate issued by classification societies confirming vessel meets safety and environmental standards. Required for vessel to trade internationally.
SOC (Safety Certificate)
Certificate confirming vessel meets SOLAS (Safety of Life at Sea) requirements. Required for all vessels trading internationally.
ISTM (International Safety Management)
International convention requiring shipping companies to implement safety management systems. Mandated by ISM Code.
Port Operations
Draft
Distance from waterline to keel (bottom of vessel). Determines maximum cargo capacity and which ports a vessel can enter. Nigerian ports range from 6.4m (Warri) to 25m (Tin Can channel).
Beam
Width of vessel at its widest point. Affects manoeuvrability and berth compatibility. Nigerian port berths typically accommodate vessels up to 50m beam.
LOA (Length Overall)
Total length of vessel from bow to stern. Nigerian ports have LOA restrictions ranging from 170m (Calabar) to 305m (Onne).
DWT (Deadweight Tonnage)
Maximum weight of cargo, fuel, ballast water, passengers, and crew that vessel can carry. Measured in tonnes. Primary measure of vessel capacity.
Displacement
Weight of water displaced by vessel, equal to vessel's total weight. Useful for calculating grounding loads and stability.
Freeboard
Distance from waterline to main deck. Safety margin against flooding. Regulated by load line conventions.
Anchorage
Designated area where vessels can anchor while waiting to enter port, load/discharge, or await orders. Nigerian ports have designated anchorage areas with specific holding capacities.
Berth
Designated location at port where vessel moors for loading/discharging. Includes mooring equipment (bollards, fenders) and shore-side infrastructure.
Quay
Solid structure alongside water where vessels can berth. Also called wharf or pier. Provides stable platform for cargo handling.
Jetty
Structure extending from shore into water, used for loading/unloading vessels. In Nigeria, jetties are used for petroleum products and crude oil operations.
Terminal
Facility at port designed for specific cargo type (container, tanker, bulk, Ro-Ro). Includes specialised equipment and infrastructure for efficient cargo handling.
Pilotage
Service provided by qualified pilots to guide vessels through navigational hazards. Mandatory in Nigerian ports. Pilots board vessel at sea and guide to berth.
Towage
Service provided by tugboats to assist vessel manoeuvring in port. Required for large vessels and strong current areas. Nigerian ports require tugs for vessels over certain sizes.
Bunkering
Process of supplying fuel to vessel. Can be done at berth, anchorage, or via bunker barge. Nigerian ports offer bunkering services at major terminals.
Stevedore
Company or workers responsible for loading and discharging cargo. Licensed by port authority. In Nigeria, stevedoring operations are regulated by NPA.
Gantry Crane
Large crane mounted on rails for loading/unloading containers. Nigerian container terminals have gantry cranes with 30-50 tonne lifting capacity.
Mobile Crane
Crane mounted on mobile platform for versatile cargo handling. Used for break bulk, project cargo, and general cargo operations.
Ro-Ro (Roll-on/Roll-off)
Terminal or vessel designed for wheeled cargo (vehicles, trucks, trailers). Cargo rolls on and off via ramps. Growing in Nigerian ports due to vehicle imports.
Break Bulk
Cargo loaded individually (bags, boxes, drums, pipes) rather than in containers. Common in Nigerian ports for construction materials, machinery, and consumer goods.
Container
Standardised steel box (20ft or 40ft) for transporting goods. TEU (Twenty-foot Equivalent Unit) is standard measure. Nigerian ports handle ~1.5 million TEU annually.
TEU (Twenty-foot Equivalent Unit)
Standard measure of container capacity. One 20ft container = 1 TEU; one 40ft container = 2 TEU. Nigerian port throughput measured in TEU.
FEU (Forty-foot Equivalent Unit)
One 40ft container = 2 TEU. Used for measuring vessel and terminal capacity.
Bill of Lading (B/L)
Document issued by carrier acknowledging receipt of cargo for shipment. Serves as receipt, contract of carriage, and document of title. Essential for cargo collection.
Manifest
Document listing all cargo on vessel, including descriptions, quantities, and consignees. Required by customs and port authorities.
Ship's Agent
Local representative of vessel owner or operator at port. Handles documentation, customs clearance, pilotage, berthing, and other port operations.
Port Authority
Government body responsible for managing and regulating port operations. In Nigeria, NPA (Nigerian Ports Authority) manages all federal ports.
Free Zone
Designated area with relaxed customs and tax regulations to encourage trade and investment. Nigerian free zones include Onne, Calabar, and Lagos.
Bonded Warehouse
Warehouse where imported goods can be stored without paying duties until released for consumption. Used for storing goods pending customs clearance.
Demurrage
Charge for using container beyond free time at terminal. Different from charter party demurrage: this applies to container usage.
Regulations
NIMASA (Nigerian Maritime Administration and Safety Agency)
Federal agency regulating Nigeria's maritime sector. Handles vessel registration, seafarer certification, maritime safety, environmental protection, and cabotage enforcement.
NPA (Nigerian Ports Authority)
Federal agency managing Nigeria's port infrastructure. Responsible for port development, maintenance, and regulation of port operations.
NCS (Nigerian Customs Service)
Federal agency responsible for collecting import duties, enforcing trade regulations, and preventing smuggling. Manages NICIS II platform for customs processing.
ISPS Code
International Ship and Port Facility Security Code. Mandatory security framework for ships and ports. Non-compliance can result in vessel detention or fines.
ISM Code
International Safety Management Code. Requires shipping companies to implement safety management systems. Mandates designated person ashore (DPA) and documented procedures.
MARPOL
International convention for prevention of pollution from ships. Covers oil, chemicals, sewage, garbage, and air pollution. Six annexes addressing different pollution types.
Cabotage Act
Nigerian law restricting domestic shipping to Nigerian-flagged vessels with Nigerian crews. Foreign vessels need Section 15 waiver for specific operations.
Merchant Shipping Act
Nigerian law governing vessel registration, crew requirements, safety standards, and commercial shipping operations.
Form M
Mandatory customs document for imports >$1,000 CIF. Opened through CBN-approved bank before vessel departs loading port.
PAAR (Pre-Arrival Assessment Report)
Customs document containing assessed duty amount. Generated through NICIS II platform after document submission. Required before port entry.
NICIS II
Nigeria Customs Integrated System II. Electronic platform for customs documentation, assessment, and payment.
SONCAP
Standards Organisation of Nigeria Conformity Assessment Programme. Requires imported goods to meet Nigerian standards. Certificate required for customs clearance.
NAFDAC
National Agency for Food and Drug Administration and Control. Regulates imported food, drugs, and chemicals. Registration required for regulated products.
CVFF (Cabotage Vessel Financing Fund)
Fund established to provide loans for Nigerian shipowners to acquire vessels. Funded by 2% levy on cabotage vessel contracts.
TCC (Tax Clearance Certificate)
Certificate confirming company has paid all taxes. Required for government contracts and vessel registration.
P&I Club (Protection and Indemnity)
Mutual insurance association covering third-party liabilities. Shipowners and charterers typically required to have P&I coverage.
H&M Insurance (Hull and Machinery)
Insurance covering physical damage to vessel. Mandatory for all vessels. Premium based on vessel value, age, and trading area.
War Risk Insurance
Additional coverage for losses from war, terrorism, piracy, and political violence. Required for West African trades due to Gulf of Guinea piracy.
Classification Society
Independent organisation that sets and maintains technical standards for ship construction and operation. Examples: Lloyd's Register, DNV, Bureau Veritas.
Flag State
Country where vessel is registered. Vessel must comply with flag state regulations. Popular flags: Panama, Liberia, Marshall Islands, Nigeria.
Port State Control
Inspection of foreign vessels in port to verify compliance with international conventions. Can result in detention for serious deficiencies.
IMO (International Maritime Organization)
UN agency responsible for international maritime safety, security, and environmental protection. Develops conventions and codes.
SOLAS (Safety of Life at Sea)
International convention establishing minimum safety standards for ships. Covers construction, equipment, and operation.
Load Line Certificate
Certificate indicating maximum draft vessel can be loaded to, based on vessel's condition and trading area. Tropical, Summer, Winter, and Fresh Water zones.
Offshore Operations
Dynamic Positioning (DP)
Computer-controlled system maintaining vessel position and heading using thrusters. Classified as DP1 (basic), DP2 (redundant), DP3 (highest redundancy). DP2 required for most Nigerian offshore operations.
Bollard Pull
Measure of tugboat's pulling power in tonnes. Measured by securing tug to fixed bollard. Nigerian ports require 40-80 tonnes bollard pull for large tanker berthing.
ROV (Remotely Operated Vehicle)
Underwater robot controlled from surface vessel. Used for inspection, maintenance, and construction in deepwater offshore operations.
A-Frame
Hydraulic structure on vessel stern used for launching and recovering subsea equipment (ROVs, diving bells, towed equipment).
Umbilical
Bundle of cables and hoses connecting ROV or subsea equipment to surface vessel. Provides power, communication, and hydraulic fluid.
Mooring Buoy
Floating buoy to which vessel can moor in open water. Used for offshore loading/unloading operations and vessel positioning.
SPM (Single Point Mooring)
Floating facility allowing vessel to moor and transfer cargo via floating hoses. Used at Bonny, Forcados, and Lekki terminals.
CALM Buoy (Catenary Anchor Leg Mooring)
Type of SPM using catenary mooring lines to seabed. Allows vessel to weathervane around buoy during cargo transfer.
Rig Move
Operation of moving offshore drilling rig from one location to another using tugs and AHTS vessels. Requires specialised equipment and experienced crew.
Anchor Handling
Operation of deploying and recovering anchors for moored vessels or rigs. AHTS vessels with high bollard pull perform anchor handling operations.
Dive Support
Operations involving divers for underwater inspection, maintenance, and construction. Requires DP vessel with dive bell and saturation diving system.
Pipe-laying
Operation of laying subsea pipelines. Requires specialised pipe-laying vessel with dynamic positioning and pipe handling equipment.
Offshore Installation
Fixed or floating structure used for oil and gas production. Includes platforms, FPSOs, and subsea production systems.
Subsea Production
Oil and gas production from wells on seabed, connected to surface facilities via risers and umbilicals. Used in deepwater West African fields.
Riser
Pipe connecting subsea wellhead to surface vessel or platform. Transports produced fluids from seabed to processing facilities.
Wellhead
Structural and pressure-containing interface at top of oil or gas well. Controls flow of hydrocarbons from reservoir.
BOP (Blowout Preventer)
Safety device installed on wellhead to prevent uncontrolled release of hydrocarbons (blowout). Critical safety equipment for drilling operations.
Day Rate
Daily payment for offshore vessel or rig hire. Includes vessel, crew, and equipment. Nigerian offshore day rates vary by vessel type and market conditions.
Offshore Supply Base
Shore-based facility for storing and transferring supplies to offshore installations. Major bases in Nigeria include Lagos, Port Harcourt, and Warri.
Cargo & Trade
CIF (Cost, Insurance, Freight)
Incoterm where seller pays cost, insurance, and freight to destination port. Risk transfers to buyer when goods are loaded on vessel. Common in Nigerian imports.
FOB (Free on Board)
Incoterm where seller delivers goods on board vessel at loading port. Risk transfers to buyer when goods pass ship's rail. Common in crude oil exports.
CFR (Cost and Freight)
Incoterm where seller pays cost and freight to destination port. Risk transfers to buyer when goods are loaded on vessel.
TTO (Tanker Take Over)
Vessel takes over cargo from another vessel via ship-to-ship transfer. Common in West African crude oil trading.
TTT (Tanker to Tanker)
Ship-to-ship transfer of cargo between two tankers. Used when one vessel cannot reach the terminal directly.
Bill of Exchange
Financial document requiring payment of specified amount at specified time. Used in international trade for payment settlement.
Letter of Credit (L/C)
Bank guarantee of payment upon presentation of specified documents. Provides security for both buyer and seller in international trade.
HS Code (Harmonized System)
International standardised system for classifying traded products. Used by customs authorities worldwide for duty calculation and trade statistics.
IMDG Code
International Maritime Dangerous Goods Code. Regulations for safe transport of dangerous goods by sea. Covers classification, packaging, and documentation.
Cargo Manifest
Document listing all cargo carried by vessel, including descriptions, quantities, consignees, and destinations. Required by port and customs authorities.
Stowage Plan
Diagram showing how cargo is arranged in vessel's holds and on deck. Ensures safe and efficient cargo loading.
Draft Survey
Method of determining cargo weight by measuring vessel's draft before and after loading/discharging. Common for bulk cargo measurements.
Deadweight Tonnage (DWT)
Maximum weight of cargo, fuel, ballast, and supplies vessel can carry. Primary measure of vessel capacity.
Displacement
Weight of water displaced by vessel, equal to vessel's total weight. Used for stability calculations.
Gross Tonnage (GT)
Measure of vessel's overall internal volume. Used for determining manning, safety, and regulatory requirements.
Net Tonnage (NT)
Measure of vessel's cargo-carrying volume. Used for port dues calculation.
Deadweight Tonnage
Maximum weight vessel can carry, including cargo, fuel, ballast, and crew. Expressed in metric tonnes.
Nigerian Port Specific
NPA Terminal Operator
Licensed company managing specific terminal at Nigerian ports. Examples: APM Terminals (Apapa), ENL Consortium (Tin Can), BUA Ports (Lagos).
Stevedoring Company
Licensed company performing cargo loading/discharging operations. Must be NPA-licensed. Examples: Josephdam, JMG, INTELS.
Ship Chandler
Company supplying provisions, stores, and equipment to vessels. Essential service at Nigerian ports for vessel maintenance and crew welfare.
GEMS (Global Extensible Management System)
NPA's electronic port management system for vessel scheduling and cargo tracking.
PREPAID
Status indicating all port charges have been paid before vessel departure. Required for vessel clearance.
NOR Tendered
Status when vessel has submitted Notice of Readiness to port authority and charterer's agent.
berth Occupancy
Percentage of time berths are occupied by vessels. High occupancy indicates congestion; Nigerian ports often operate at 80-95% occupancy.
Vessel Queue
Number of vessels waiting for berth at anchorage. Long queues indicate port congestion and increase waiting times and costs.
Port Dues
Charges levied by port authority for use of port facilities. Based on vessel tonnage and time in port.
Cargo Dues
Charges levied per tonne of cargo handled. Different rates for different cargo types (container, bulk, liquid).
Pilotage Dues
Charges for pilot services. Based on vessel tonnage and distance pilotage performed.
Towage Dues
Charges for tugboat services. Based on vessel size and number of tugs used.
Wharfage
Charge for use of wharf facilities. Typically included in cargo dues.
Frequently Asked Questions
What is a VLCC?
VLCC stands for Very Large Crude Carrier. These are oil tankers with a capacity between 200,000 and 320,000 deadweight tonnage (DWT), typically 330-340 metres in length. VLCCs are the workhorses of long-haul crude oil transportation, carrying approximately 2 million barrels of crude oil per voyage. In West Africa, VLCCs primarily load crude at terminals like Bonny, Forcados, and Brass for export to Europe, Asia, and the Americas.
What is BIMCO?
BIMCO (Baltic and International Maritime Council) is the world's largest international shipping association, representing approximately 60% of the world's merchant fleet. BIMCO produces standard form charter parties, including GENCON (voyage charter), SHELLTIME (time charter for tankers), and BARECON (bareboat charter). Using BIMCO standard forms reduces negotiation time, lowers legal costs, and provides balanced terms acceptable to both shipowners and charterers.
What is NIMASA?
NIMASA (Nigerian Maritime Administration and Safety Agency) is the federal agency responsible for regulating and supervising Nigeria's maritime sector. NIMASA handles vessel registration, seafarer certification, maritime safety, environmental protection, and cabotage enforcement. All vessels operating in Nigerian waters must be registered with NIMASA, and vessel owners must pay annual levies and maintain compliance with NIMASA regulations.
What is a charter party?
A charter party is a contract between a shipowner and a charterer for the hire of a vessel or the carriage of goods. The three main types are: Voyage Charter (vessel hired for a specific voyage), Time Charter (vessel hired for a period), and Bareboat Charter (vessel hired with no crew). In West Africa, voyage charters are common for crude oil exports, while time charters are used for offshore support vessels and long-term contracts.
What is DEMURRAGE?
Demurrage is a charge paid by the charterer to the shipowner when a vessel is delayed beyond the agreed loading or discharging time (laytime). The rate is specified in the charter party, typically per day or per hour. In West African ports, demurrage can be significant due to congestion, customs delays, and port inefficiencies. Charterers can mitigate demurrage risk by negotiating flexible laycan terms and having all documentation ready before vessel arrival.
What is DESPATCH?
Despatch is the opposite of demurrage; it is a payment from the shipowner to the charterer when loading or discharging is completed faster than the agreed laytime. The despatch rate is typically half the demurrage rate (despatch half demurrage), though this can be negotiated. In efficient operations, despatch earnings can offset part of the voyage costs.
What is LAYCAN?
LAYCAN (Laydays Canceling) is the time window during which a vessel must present itself for loading. The layday is the earliest date the vessel can arrive, and the canceling date is the latest date. If the vessel arrives after the canceling date, the charterer has the right to cancel the charter party. LAYCAN periods are typically 5-10 days for voyage charters.
What is LAYTIME?
Laytime is the agreed time allowed for loading and discharging operations. It is specified in the charter party, often as a number of days or hours. Once laytime expires, demurrage begins accruing. Laytime can be calculated as: Laytime = Cargo Quantity / Loading Rate (or Discharging Rate). For example, if a vessel must load 100,000 tonnes at 15,000 tonnes/day, laytime is approximately 6.67 days.
What is NOR?
NOR (Notice of Readiness) is a formal notice from the vessel's master to the charterer or their agent, stating that the vessel has arrived at the port or loading/discharging area and is ready to load or discharge cargo. The NOR triggers the start of laytime calculation. In Nigerian ports, NOR is typically tendered to the port authority and the charterer's agent simultaneously.
What is Worldscale?
Worldscale is a standardised rate system used for calculating tanker freight rates. It is published by the Worldscale Association and is updated annually. The system assigns a flat rate to specific routes, and the actual freight rate is expressed as a percentage of the Worldscale rate. For example, WS 100 means the freight rate equals the Worldscale flat rate, while WS 120 means 120% of the flat rate.
Need Help Understanding Maritime Terms?
Our team at Calmwaters Shipping can help you understand the complexities of maritime terminology and vessel chartering. Whether you are a first-time charterer or an experienced ship operator, we provide clear, practical guidance.
Contact us at info@westafricacharter.com or call +234 916 333 1144