In the realm of maritime shipping, the Notice of Readiness (NOR) holds significant importance in facilitating efficient cargo operations. This document serves as a formal communication between the ship’s master or agent and the charterer or receiver of the cargo. The primary purpose of the NOR is to inform the relevant parties that the ship has arrived at the designated port or terminal and is prepared to commence loading or unloading operations. The tendering of a valid NOR marks the commencement of laytime, a crucial period during which the charterer is expected to load or discharge cargo within the agreed timeframe. Failure to complete these operations within the stipulated laytime may result in demurrage charges for the charterer.
Key Facts
- Purpose: The notice of readiness serves two purposes: (i) to inform the charterers that the vessel is at their disposal, and (ii) to start the running of hire or laytime.
- Validity: For the notice of readiness to be valid, the ship must be physically capable of performing cargo operations, with clean and ready holds to receive cargo. Time lost in cleaning holds is usually excluded from laytime.
- Acceptance: The notice of readiness must be accepted by the charterers to be binding. If not accepted, the shipowner should continue tendering the notice to safeguard against potential disputes.
- Commencement of laytime: Laytime, the agreed period for loading or unloading, commences upon the expiration of a certain time after the receipt of the notice of readiness or upon the ship’s arrival in berth, whichever occurs first. Certain clauses, such as “whether in berth or not” (WIBON), “whether customs cleared or not” (WICCON), and “whether in free pratique or not” (WIFPON), indicate that laytime commences irrespective of certain conditions.
- Premature notice: If a notice of readiness is given prematurely, it does not amount to a breach of contract, but it is ineffective to start time running. A valid notice of readiness can be given once the ship has been properly cleaned.
Validity of the Notice of Readiness
For a Notice of Readiness to be considered valid, certain criteria must be met. Primarily, the ship must be physically capable of performing cargo operations. This entails ensuring that the ship’s holds are clean and ready to receive cargo, with all necessary equipment and personnel available for the loading or unloading process. Additionally, the ship must comply with all applicable regulations, including customs, immigration, and other port formalities. Furthermore, the ship must have obtained free pratique, a clearance granted by local health authorities confirming that the ship is free from contagious diseases or infections.
Acceptance of the Notice of Readiness
The Notice of Readiness becomes binding only upon acceptance by the charterers. If the charterers do not accept the NOR, the shipowner is advised to continue tendering the notice to safeguard against potential disputes. It is worth noting that the acceptance of an invalid NOR may lead to the waiver of the charterers’ right to claim damages for any losses incurred due to the delay.
Commencement of Laytime
The commencement of laytime is closely tied to the tendering and acceptance of the Notice of Readiness. Laytime typically begins after a specified period following the receipt of the NOR or upon the ship’s arrival in berth, whichever occurs first. Certain clauses, such as “whether in berth or not” (WIBON), “whether customs cleared or not” (WICCON), and “whether in free pratique or not” (WIFPON), stipulate that laytime commences irrespective of whether the ship has secured a berth, obtained customs clearance, or received free pratique.
Premature Notice of Readiness
In instances where a Notice of Readiness is given prematurely, it does not constitute a breach of contract. However, such a notice is ineffective in starting the running of time. A valid NOR can only be issued once the ship has been properly cleaned and is ready to commence cargo operations.
Conclusion
The Notice of Readiness plays a pivotal role in shipping operations, marking the commencement of laytime and potentially triggering demurrage charges if cargo operations exceed the agreed timeframe. To ensure the validity of the NOR, shipowners must adhere to specific requirements, including the physical readiness of the ship, compliance with regulations, and obtaining free pratique. The acceptance of the NOR by the charterers is crucial for its binding effect. Laytime typically commences after a specified period following the receipt of the NOR or upon the ship’s arrival in berth, subject to specific clauses that may modify this commencement. Lastly, premature Notices of Readiness are ineffective in starting the running of time and should be avoided.
Sources
- Defence Guides: Notices of readiness in a nutshell [PDF]. (n.d.). Retrieved from https://www.westpandi.com/getattachment/8d140487-574c-41e8-8a3e-38033e127082/defence-guide_notice_of_readiness_4pp_v2_lr.pdf
- Notice of Readiness (NOR) | HandyBulk. (n.d.). Retrieved from https://www.handybulk.com/notice-of-readiness-nor/
- Notice of Readiness | Logistics Glossary. (n.d.). Retrieved from https://www.logisticsglossary.com/term/notice-of-readiness/
FAQs
1. What is a Notice of Readiness (NOR) in shipping?
Answer: A Notice of Readiness is a formal document issued by the ship’s master or agent to inform the charterer or receiver of the cargo that the ship has arrived at the designated port or terminal and is ready to commence loading or unloading operations.
2. What are the requirements for a valid Notice of Readiness?
Answer: For a NOR to be valid, the ship must be physically capable of performing cargo operations, with clean and ready holds, and must comply with all applicable regulations, including customs, immigration, and other port formalities. Additionally, the ship must have obtained free pratique, a clearance granted by local health authorities confirming that the ship is free from contagious diseases or infections.
3. When does laytime commence?
Answer: Laytime, the agreed period for loading or unloading, typically commences after a specified period following the receipt of the NOR or upon the ship’s arrival in berth, whichever occurs first. Certain clauses, such as “whether in berth or not” (WIBON), “whether customs cleared or not” (WICCON), and “whether in free pratique or not” (WIFPON), stipulate that laytime commences irrespective of whether the ship has secured a berth, obtained customs clearance, or received free pratique.
4. What happens if a Notice of Readiness is given prematurely?
Answer: If a NOR is given prematurely, it does not constitute a breach of contract, but it is ineffective in starting the running of time. A valid NOR can only be issued once the ship has been properly cleaned and is ready to commence cargo operations.
5. What is the purpose of the Notice of Readiness?
Answer: The Notice of Readiness serves two main purposes: (i) to inform the charterers that the vessel is at their disposal, and (ii) to start the running of hire or laytime.
6. Can the charterers reject the Notice of Readiness?
Answer: Yes, the charterers may reject the NOR if the ship is not ready to commence cargo operations or if the NOR is not tendered in accordance with the terms of the charter party agreement.
7. What are the consequences of an invalid Notice of Readiness?
Answer: An invalid NOR may lead to delays, additional costs, and potential disputes between the involved parties. It may also result in the loss of the right to claim demurrage for any delays in cargo operations.
8. How can shipowners ensure the validity of the Notice of Readiness?
Answer: Shipowners can ensure the validity of the NOR by adhering to specific requirements, including the physical readiness of the ship, compliance with regulations, and obtaining free pratique. They should also ensure that the NOR is tendered in accordance with the terms of the charter party agreement.