This is the latest date mutually agreed upon between shipowners and charterers, on which the vessel must be ready to load at the first port or be delivered to the time charterer. The arrival of the vessel on time may be essential to the charterer for various reasons. Should the vessel be late, charterers are entitled to cancel the charterparty.
If it appears that a vessel cannot possibly arrive at the port of loading in time and the delay has not been occasioned by events beyond the owners’ control, and. which would automatically terminate the charter, the shipowners are bound’ to send their vessel to the port of loading, irrespective of the delay in arrival beyond the original cancelling date. The charterer can cancel even if there is no fault of the shipowner, for example, if the vessel is delayed by bad weather on its approach voyage to the place of delivery or the first loading port.
Only after notice of readiness has been given to the charterers will they have to decide whether they will accept the vessel or whether they will cancel the charter. Commercially, their decision will be governed mainly by the trend of the freight market. Should the open market rates have risen since the fixture of the vessel in question, it is clear that the original charter will be maintained. Conversely, the charter will be cancelled or a new charter will be closed at a lower rate if the open market rates have declined in the meantime and suitable cheaper tonnage can be chartered for prompt loading.