Supply chains, logistics, and transportation each have important distinctions. Understanding these Negotiating charter party agreements in English? Master key clauses like Laytime, Demurrage, and BIMCO standards. Learn to protect your interests and avoid hidden costs in your shipping deals.

«Laytime,» «Demurrage,» and «Arbitration»: Tips to Master Maritime Contract Negotiations in English

Negotiating a Charter Party agreement can be a minefield of technical terms, especially when the language of negotiation is English. In 2025, with such a dynamic market, understanding and correctly negotiating key clauses is fundamental to protecting your interests and avoiding unexpected extra costs.

Here are some practical tips and the clauses you should focus on.

1. Know the Lingo

Before sitting down to negotiate, familiarize yourself with the terms that will define your operation. It’s not about being fluent, but about understanding the financial impact of each concept.

• Laytime: This is the time allotted in the contract for the charterer to load or discharge the cargo. It is crucial to clearly define when it starts counting («Notice of Readiness» or NOR) and when it stops.
• Demurrage: This is the penalty the charterer pays to the shipowner if they exceed the agreed-upon laytime. The daily demurrage rate should be a central point of your negotiation.
• Despatch: This is a reward the shipowner pays to the charterer if they finish loading/unloading operations before the laytime expires. Not all contracts include it, but it’s always worth negotiating.

2. Clauses to Negotiate Under a Magnifying Glass

Not all clauses carry the same weight. Pay special attention to these:

• Arbitration Clause: Where will disputes be resolved? London (LMAA), New York (SMA), or Singapore (SCMA) are the most common venues. The arbitration venue defines the applicable law and can have a significant impact on the costs and outcome of a dispute. Tip: Try to choose a venue that is geographically convenient or legally favorable for your company.
• Lien Clause: This gives the shipowner the right to retain the cargo if the freight has not been paid. Negotiate the terms to ensure this clause is not applied unfairly.
• Ice Clause: This allows the ship’s captain to divert if they deem ice conditions to be dangerous. Make sure the clause is reasonable and does not leave the charterer without options.
• War Risks Clause: This defines responsibilities and additional costs should the vessel have to transit through a conflict zone. In 2025, with instability in several regions, this clause is more important than ever.

3. Use Standard Forms as a Foundation

Don’t reinvent the wheel. Organizations like BIMCO offer standard contract forms (e.g., GENCON, NYPE) that are recognized and accepted throughout the industry. These forms provide a solid and balanced foundation.

Tip: Use these forms as a starting point and negotiate amendments or additional clauses («rider clauses») that are tailored to the specifics of your operation.

4. Be Clear and Unambiguous

Contractual English leaves no room for interpretation. Avoid ambiguity. If something isn’t clear, ask for it to be rewritten. A vague term can cost thousands of dollars in a dispute.

The best negotiation is a prepared one. Knowing these points will give you the confidence to secure fair and efficient agreements, protecting your supply chain in the competitive maritime market of 2025.