THE IMPORTANCE OF TIME

As it is well known almost in all industries that time is a very important aspect in determining whether immense losses will be incurred  or not by parties involved. Probably one of the clearest examples of the expression ’time is money’ is demonstrated in the operation of commercial ships.

First, there is the massive outlay of capital represented by the ship itself.  If one invested the cost of quite a modest ship at today’s rates of return on capital one could easily be calculating one’s interest in terms of about seven to ten dollars per minute so that is the first measure of loss if a ship is idle.

Add to that, those costs which are incurred whether the ship is moving or staying still and it is easy to understand a ship operator’s obsession with time.

A ship is earning money when on the move with cargo in her, ergo time spent not moving inevitably becomes considered as money being lost.

Ship operators (that expression is being used to cover shipowners or time-charterers) will, therefore, devote a great deal of their attention to the time the ship spends in port. 

For simplicity, therefore, we shall take the two elements mentioned above in reverse order and consider first:- Loading/Discharging Rates

The speed of loading and discharging is often expressed in terms of the number of tons per day that will result in the number of days/hours to be devoted to the loading/discharging operation.

In many other charterparties the time of loading/discharging is simply stipulated as so many hours. Be aware that this can be stated in a number of different ways; it can for example be one time for loading and another for the discharge, alternatively a set time can be agreed that will cover both operations. The latter applies to tankers in particular.

Most tanker charters work on 72 hours all told for loading and discharging.  It may seem surprising that this rate is usually agreed regardless of the size of the ship but the fact is that the ship’s pipe-work to receive the cargo is constructed in proportion to the ship’s size as is the ship’s pumping machinery for discharging the cargo.

Next, consideration is given to what days and parts of days will be used for working.  With tankers it is usually easy in that oil installations employ very few people and some very robust machinery so that they generally work 24 hours a day, 7 days a week.

Bulk dry cargoes such as iron ore can be similar where the loading and discharging appliances are highly mechanised and again not very labour intensive.  In such charters one will encounter the initials SHINC which you will remember from the previous lesson means that time will count every day without exception (often referred to a “running days”).

As one moves to less mechanised cargo handling so the question of manual labour arises, it becomes more the rule to find the initials SHEX because, unless someone is prepared to pay overtime rates, the men do not normally work on Sundays or Public Holidays.

To a large extent the rate of loading/discharging will be dictated by the cargo-handling appliances available but not entirely, and it is well known that major disputes between shipowners and charterers arise because of time loss or gain during this operation and which known as demurrage and despatch.