Understanding Ship Laycan, Function, & Factors That Affect It

In sea freight, there are various terms and important information that need to be understood to ensure smooth shipping, one of which is laycan. A ship's laycan is the estimated time of the ship's arrival according to the predetermined dates.

This article discusses laycan and the factors that affect it. So, check out the full details below.

What Is a Ship's Laycan?

A ship's laycan, or laydays and canceling date, is the window of arrival and readiness of the ship for loading and unloading at the port. This information is important for the loading and unloading process.

Laydays are the earliest dates when the ship is allowed to arrive and give the Notice of Readiness (NOR). Meanwhile, the canceling date is the latest arrival date by which the ship charterer must cancel the agreement.

Laycan serves as a reference for planning logistics activities, enabling industry players to prepare the necessary facilities, equipment, and resources before the ship arrives for loading and unloading operations.

The ship's laycan dates are set in the charter party agreement between the charterer and the shipowner. This agreement includes information about the port, cargo, expected timing, and freight rates.

For example, if the laycan date in the agreement is July 14–20, it means the ship can submit its NOR starting from July 14. If the ship arrives on July 21, the charterer has the right to cancel the agreement.

Why Is Ship Laycan Important?

Ship laycan is a form of scheduling commitment. For ship owners, laycan provides a timeline for the logistics process, enabling them to prepare the crew to handle loading and unloading. In other words, sticking to the laycan can help ensure the smooth running of the agreement as a whole.

Following this time frame can also reduce the risk of demurrage charges. These fees are imposed if the specified time runs out. So, what happens if the ship arrives before the laydays? The ship has to wait until the laycan date to submit the NOR. This waiting time is usually not compensated.

Moreover, ship laycan also has several functions, as follows:

1. Planning the Logistics Process

Companies can plan loading and unloading activities because they already know the ship's expected arrival and departure at the port. As a result, the loading and unloading process can take place optimally.

2. Determining Ship Arrival Time

The main function of a ship's laycan is to determine the arrival time at the port. This expected timing is important for effective coordination among port operators, ship agents, and cargo-handling companies.

3. Managing Ship Queues

Laycan makes it easier for companies to manage ship queues as efficiently as possible, ensuring loading and unloading run smoothly. This can simplify logistics when the port is busy.

4. Preventing Delays and Disruptions

A ship's laycan determines its arrival and departure times, allowing the company to anticipate risks that could cause disruptions.

5. Avoiding Extra Costs

Laycan of a ship manages the risk of extra costs due to delays. When a ship arrives after the cancellation date, the charterer can cancel the contract and is not required to cover rental costs. In addition, laycan also prevents storage costs that might occur if goods stay at the port for too long.

Factors That Can Affect Laycan

Several factors can affect laycan, including:

Port facilities: Inadequate or under-repair loading and unloading facilities can affect laycan, so the company has to adjust the ship's arrival schedule until the facilities are ready to use.
Natural conditions: Sea logistics are easily affected by natural conditions, such as large waves or storms. This can delay ship arrivals or disrupt the logistics process. That's why companies need to consider the weather forecast when determining laycan.
Completeness of documents: Incomplete documents can slow the logistics process because schedules must be adjusted until the required documents and permits are ready.
Port occupancy: When the port is busy, queue times may become tighter. As a result, even small delays or coordination errors can disrupt the entire queue.

Laytime, Laydays, and Laycan in Logistics

When talking about a ship's laycan, you might also hear about laytime and laydays. Here is the full information:

1. Laytime

Laytime is the allowed duration for unloading and loading cargo. This time is specified in the contract and is measured from the ship's arrival until the loading and unloading process is complete.

Laytime determines the period for loading and unloading without extra charges (demurrage), as agreed by the parties to the charter party. If the loading and unloading process happens faster, the charterer is entitled to a dispatch bonus.

2. Laydays

Laydays are the date or days agreed upon in the charter party regarding when the ship must arrive at the port and be ready to load or unload.

3. Laycan

Laycan of a ship is the time span that determines the arrival time and readiness for loading or unloading. As explained earlier, the charterer can cancel the contract if the ship arrives after the cancellation date. The ship's arrival is seen from the submission of the NOR and the physical arrival of the ship at the port.

Trusted Marine Logistics Services for Chemicals and LPG from CDI

The laycan of a ship is one of the pieces of information that must be understood by the parties involved in the marine logistics process. This time span helps ensure smooth loading and unloading and ensures ships come and go efficiently according to schedule.

Not only do you need to consider the ship's laycan, but the company also needs to identify reliable logistics solutions to ensure a smooth supply chain, especially when distributing chemicals and LPG that require special handling.

PT Chandra Daya Investasi Tbk (CDI) offers marine logistics solutions through its subsidiary, PT Chandra Shipping Indonesia (CSI). We operate 10+ LPG and chemical carriers with capacities ranging from 4,200 to 9,600 DWT, with the potential to expand the fleet over time.

Don’t hesitate to consult CDI and CSI about your company’s chemical and LPG sea logistics needs, #YourGrowthPartner!