Charterers expecting dispatch sometimes receive a demurrage invoice instead - or the other way around. The two concepts run in opposite directions, but they are calculated against the same clock, and confusing them is rarely cheap.
Demurrage is what the charterer pays the shipowner when loading or discharging takes longer than the laytime allowed by the charter party. Once laytime runs out, the demurrage rate kicks in - usually a fixed daily figure, pro rata for fractions of a day.
The rate is set in the charter: "USD X per day or pro rata." That is the contract; that is the bill.
Dispatch is the mirror. If loading or discharging is faster than laytime, the charterer has saved the shipowner time. The shipowner pays the charterer dispatch money.
Market practice usually sets dispatch at half the demurrage rate - so-called "half demurrage" - but it is a matter of agreement, not law. The number lives in the charter party, not in a textbook.
The clock is the same in both directions: time actually used to load or discharge versus laytime allowed. Faster than laytime - dispatch. Slower than laytime - demurrage.
Counting starts from a valid Notice of Readiness unless the charter specifies otherwise. What qualifies as a working day - whether SHEX, FHEX, or WWD clauses apply - can move the result by thousands of dollars.
Time saved to be paid for at half the demurrage rate.
The first mistake is mixing methods. The charterer calculates one way; the owner calculates another; an invoice arrives that does not match either spreadsheet.
The second is overlooking the charter mechanics. Asbatankvoy, Gencon, NYPE all treat laytime slightly differently. A line about "reversible laytime" combines loading and discharging into a single account - and changes everything.
The third is forgetting exceptions. Rain, strikes, public holidays - if the charter excludes them from laytime, they cannot quietly reappear in the demurrage calculation. Operators discover this through arbitration decisions.
Demurrage: charterer to shipowner. Dispatch: shipowner to charterer.
In a sale contract chain, these obligations often travel further. An FOB trader may pass demurrage up to the producer; a CIF seller may receive dispatch from the buyer. Each link is a separate transaction with its own laytime calculation.
Track the clock from day one in a single statement of facts. Take laytime, exceptions, and rates from the charter, not from market conventions. Any sentence beginning "we usually do it this way" is a prompt to re-read the contract.
Demurrage and dispatch sit at opposite ends of one ruler. Count them separately, and the invoice tends to surprise. Count them together and against the charter, and you pay only what you owe.