A charter party indicates port, vessel, laytime, and commodity details, among other types of important charter information. The laytimes mentioned in a charter party can be calculated in various ways, one of which is using a method called SHINC.
SHINC = Sundays and Holidays Included
SHINC stands for Sundays and Holidays Included and is a method that shipowners use to calculate the total laytime of a vessel in a port. This means that laytime includes Sundays and public holidays.
Laytime in a charter party refers to the total allotted time that a charterer has to load and/or unload cargo to or from a vessel when it’s berthed. When it comes to SHINC each day is counted in the laytime, also if loading activities occur during Sundays or any public holiday.
Take note that SHINC is the opposite of SHEX, which stands for Sundays and Holidays Excluded. In this article, we’ll take a closer look at what SHINC is, which party this term favors, and also share a case study with you, so that you’re able to grasp this concept better.
Who Does SHINC Favor?
As SHINC includes Sundays and public holidays in the laytime calculation, this term generally favors the shipowner. Here’s why!
Documents such as Statement of Facts (SOF) or timesheets keep track of all vessel activities when berthed at the port of loading or discharge, including all loading and unloading activities (during the laytime).
When the laytime granted stretches over several days, the shipowner calculates the total time that the charterer uses to load the vessel with cargo. In this calculation, the shipowner includes Sundays and also public holidays in the calculation.
This is important to note as any excess days or time for loading or unloading beyond the agreed laytime in the charter party may incur demurrage costs. Vessel demurrage costs are typically charged on a daily/hourly hire rate or a fraction thereof until the loading or unloading activities have been completed.
SHINC Case Study & Example
For you to draw parallels to a real-life scenario, we’ve created an easy-to-understand case study using laytime with SHINC terms. In this case study, a shipper plans to charter a vessel from Vietnam to the United Arab Emirates (UAE) for a shipment of sand on a Vessel called BBC Neptune.
Below, you’ll be able to find an excerpt of the charter party that contains important information about the laytime, laycan, and cargo details, as well as other relevant charter information.
- Shipper: Vietnam Cement Corporation
- Vessel: BBC Neptune
- Owners: Breakbulk Owners Inc.
- Laytime: 15 days AFSPS ATDN SHINC Vietnam (At the First Sea Pilot Station Anytime of Day and Night)
- Laycan: April 15 – 30, 2022
- Cargo: Sand in bulk
- Quantity : 4,000MT
- Port of Loading: Hai Phong, Vietnam
- Port of Discharge: Jebel Ali, United Arab Emirates
- Hire rate: $7,000 pdpr (per day pro data)
In this example, the laytime is specified at a total of 15 days SHINC. This means that the charterer has a total of 15 days to carry out any loading and/or unloading activities. These 15 days are including Sundays and holidays.
For example, if the loading activities begin on April 15, every single day is counted until April 30, even Sundays and public holidays – therefore, favoring the shipowner. If the loading activities take longer than the agreed laytime, then the charterer is required to pay vessel demurrage costs.
On the other hand, if the charterer completes the loading activities within the agreed laytime as per the charter party, they may be paid a dispatch for the total number of days the loading was completed earlier. A dispatch is the opposite of a demurrage charge.
Does It Make Sense To Negotiate Longer Laytime SHINC Terms?
This depends on the agreement between the shipowner and the charterer. Charterers typically request longer and more favorable laytime terms, so that they can complete loading activities without being charged vessel demurrage.
However, it’s important to note that shipowners generally price additional laytime into their rate, to offset this. With that in mind, it’s more economical and effective to increase loading productivity and efficiency than to increase the laytime beyond what is reasonable.