Loaded waterline length (LWL) is the total length of a ship's hull at the waterline when it is loaded with a given cargo.
This measure is needed to calculate hull displacement, hull speed, and, more mundanely, how much bottom paint (aka antifouling paint) you will need to use to treat your boat.
Hull speed is an important consideration for mid-sized vessels, especially sailing ships, using displacement hulls. When a ship moves it produces both a bow wave and a stern wave, which have natural frequencies. If a boat goes too fast, these two waves will merge, with the bow wave not collapsing into the wake before the stern wave starts to move out from the boat, resulting in the boat settling down into a trough of its own making, and forcing it to 'climb up' its own bow wave to progress.
The LWL will generally be shorter than the ship's length overall, and must be calculated when the ship is in the water and loaded with whatever cargo you wish to run the calculation for. While most ships are designed and registered for certain cargo weights, they will have different LWLs when running fully loaded, empty, or at any point in between.