There are various types of liner terms that make up a charter party, which is a leasing agreement between the shipowner and the charterer. One of these terms is known as FHEX.
FHEX = Fridays and Holidays Excluded
The liner term FHEX stands for Fridays and Holidays Excluded, which means that the total laytime calculation that is stipulated in the charter party excludes Fridays and all holidays.
The term laytime refers to the total allocated time that a charterer has to load (at the port of origin) or unload (at the port of discharge) the vessel. Considering this, Fridays and any type of public holidays are not counted in the total laytime.
The FHEX liner term is predominantly used in charter parties in certain Islamic trading countries, as Friday (compared to Saturday and Sunday) is considered a non-working day.
Who Does FHEX Favor?
FHEX favors the charterer, who is commonly known as the cargo owner, as Fridays and holidays are excluded in the laytime calculation. This means that they have more time to load and unload the vessel, by opting to use Fridays and/or public holidays as working days.
Charterers are required to complete loading and unloading activities within the stipulated laytime, in order to avoid vessel demurrage. Vessel demurrage is typically costly and should be avoided whenever possible.
FHEX Case Study & Example
Below, we’ve shared a case study in which a company in Japan charters a vessel to transport steel pipes to Turkey. To understand the case study, you’ll need a good understanding of the additional charter party terms: laycan and laytime.
- Charterer: Universal Steel Corporation
- Vessel: Geneva Star
- Shipowner: Breakbulk Owners Inc.
- Laycan: May 1-15, 2022
- Laytime: 10 days AFSPS ATDN FHEX Haydarpasa, Turkey (At the First Sea Pilot Station, Anytime of Day and Night, Fridays and Holidays Excluded)
- Cargo: Steel Pipes
- Quantity: 26,500MT
- Port of Loading: Osaka, Japan
- Port of Discharge: Haydarpasa, Turkey
- Hire rate: $15,000 pdpr (per day pro data)
Let’s take a closer look at the excerpt from the charter party shown above. According to the agreed terms between the shipowner and charterer, the laycan period is anytime between May 1 – 15, in which the shipowner (Breakbulk Owners Inc) of the vessel (Geneva Star) is required to inform the charterer (Universal Steel Corporation) that the vessel has arrived.
The laytime of 10 days stipulates that the charterer has a total of 10 days to load the steel pipes into the vessel. In this calculation, Fridays and holidays are excluded from the laytime.
This means that if the charterer decides to load on a Friday, that day is not considered in the laytime calculation. If the laytime is exceeded, the shipowner has the right to claim vessel demurrage from the charterer based on the daily hire rate ($15,000 per day pro data).