Dispatch Money

Dispatch Money is a term in voyage charter parties referring to a bonus paid by the shipowner to the charterer when the charterer completes loading/discharging operations ahead of the agreed laytime. It is usually calculated as a certain amount per day, based on half or all of the time saved (commonly half). Usage scenario: When actual laytime used is less than the allowed laytime stipulated in the contract, the shipowner must pay dispatch money. Note: Dispatch money is the opposite of Demurrage—demurrage is a penalty paid by the charterer to the shipowner for exceeding laytime; the dispatch rate is usually half of the demurrage rate. The contract must specify laytime commencement, calculation of time saved, and payment currency. Unlike demurrage, dispatch money is a reward, not a penalty, and not all charter parties provide for dispatch money—it must be explicitly agreed by both parties. Foreign trade practitioners should pay attention to loading/discharging efficiency to avoid disputes arising from dispatch money clauses.