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# Laytime and Demurrage Calculation

### Use

Laytime is the time period during which a vessel is at a port or berth. Demurrage is the contractually agreed penalty that is due when a vessel remains too long at a location during load or discharge operations.

#### Laytime Calculation

The laytime calculation is a function that uses the laytime agreement from freight contracts and the specific laytime events saved in the carrier nomination. In the freight contract you maintain information about the allowed laytime of a vessel during loading, discharging, or lighterage. In the carrier nomination you maintain the events that are relevant for laytime calculation. Additionally, you can customize how the system handles events that can influence the allowed laytime, such as weather conditions or facility down time at the port.

The system takes the following into account for the calculation of laytime:

Actual laytime: for the calculation of actual laytime (and demurrage), the system checks the events from the carrier nomination.

Potential laytime: the system calculates potential laytime based on the quantity in the nomination and the pump rate given in the contract or in the nomination.

The system uses the formula: Laytime potentially subject to demurrage = Total laytime incurred - (allowed laytime + excludable delays).

#### Demurrage Calculation

Demurrage is the contractually agreed penalty for exceeding the laytime (the time allowed for loading, discharging, or lighterage).

The system calculates the demurrage fee based on the potential or actual laytime, the contractually allowed laytime, and the demurrage fee maintained in the freight contract.

The system uses the formula: Demurrage costs = net demurrage time X net demurrage rate X demurrage factor.

You maintain the demurrage rates and demurrage factors as pricing conditions in Customizing.

If the contractually agreed laytime is exceeded, the system automatically calculates demurrage. You can configure the system to show the demurrage amount as a work list item.

### Prerequisites

You define the settings for the calculation of laytime, demurrage and despatch in Customizing for Industry Solution Oil & Gas (Downstream)  ®  TSW (Trader's and Scheduler's Workbench)  ®  Laytime and Demurrage:

·  Define laytime term defaults

• Assign laytime filter to relevance type