Glossary
Terms & Glossaries of Shipping and Trading
Laycan
"Laycan" is a critical freight and maritime shipping term used in charter party agreements. It defines the contractual time window for a vessel to arrive at a designated port and be ready for cargo operations.
Laycan (short for Laydays and Cancelling Date) establishes a time frame during which a vessel must arrive at the agreed port and be prepared to load or unload cargo. It consists of two key dates:
1. Laydays Commence: The earliest date the vessel may arrive and submit a Notice of Readiness (NOR). If the vessel arrives earlier, the charterer may refuse to load cargo (e.g., if goods are not yet prepared).
2. Cancelling Date: The final deadline by which the vessel must arrive and be ready. If the vessel fails to meet this date, the charterer has the right to terminate the contract without penalty.
For example, a "LAYCAN: 15TH–25TH DEC" means the vessel must arrive between December 15 and 25. Missing the window grants the charterer cancellation rights, while timely arrival binds both parties to proceed.
Risk Allocation:
· The Laycan period balances risks between shipowners and charterers. Shipowners must manage delays (e.g., weather, port congestion) to avoid cancellation, while charterers ensure cargo readiness within the window.
· Delays beyond the Cancelling Date may lead to contract termination or financial penalties (e.g., demurrage).
Interpellation Clause:
Standard contracts include an Interpellation Clause to resolve delays. If the shipowner anticipates missing the Cancelling Date, they must notify the charterer and propose a revised date. The charterer then has 48 hours to accept the new date or cancel the contract. This clause can only be invoked once per voyage.
Readiness Requirements:
· Physical Readiness: The vessel must reach the port’s commercial boundary (e.g., anchorage), even if berthing is delayed.
· Legal/Operational Readiness: Compliance with customs, inspections, and cargo hold suitability (e.g., cleanliness certificates for sensitive cargo).
Buffer Periods:
Shipowners often negotiate Laycan windows with buffer days to account for delays. Poor planning risks cancellation or demurrage costs.
Synergy with Laytime:
Laytime (the period allocated for cargo operations) typically begins once a valid NOR is issued within the Laycan window. Delays in laytime trigger demurrage, while early completion may earn despatch fees.
