Voyage, time and bareboat charters explained

Chartering vocabulary trips up a lot of first-time cargo owners. The three main structures differ mainly in who controls the vessel and who carries which cost.

Voyage charter The owner moves a defined cargo between defined ports for a lump sum or a rate per tonne. The owner pays for bunkers, crew and port costs. The charterer's main exposures are laytime and demurrage — the clock that runs when loading or discharge takes longer than agreed.

Best for: a single parcel, a first shipment on a new lane, or any situation where you want a fixed freight number.

Time charter The charterer hires the vessel for a period and directs where it trades. The owner still crews and maintains it; the charterer pays bunkers, port charges and canal dues, and pays hire per day whether or not the vessel is loaded.

Best for: a repeating programme where you have enough cargo to keep a ship busy and want control over routing.

Bareboat charter The charterer takes the vessel without crew and operates it as if it were their own, usually for years. This is a financing and operating structure, not a shipping decision.

The clauses that actually decide your economics - Laytime and demurrage rate — set realistically against the terminal's actual performance, not its brochure. - Notice of readiness and when laytime starts, especially at congested anchorages. - Cargo description, stowage factor and any heating or inerting requirement. - Bunker adjustment and, increasingly, emissions cost pass-through.

As a broker we are looking for the fixture that matches your risk appetite, not the lowest headline rate. A cheap voyage charter into a congested berth with a punishing demurrage rate is not cheap.