Ship Chartering
Complete guide to ship chartering: charter types, the chartering process, and how dry bulk freight is priced.
Reviewed by Luis Carlos Alvarez, Head of Commodities
What this hub covers
Ship chartering is the commercial agreement that puts a cargo on a vessel: who hires whom, who pays for fuel and port costs, how fast the ship must load and discharge, and what the freight or hire is worth. This hub explains the chartering of dry bulk and breakbulk tonnage from first principles, from the shape of each charter down to the clauses that decide who carries the cost when a voyage runs late.
The foundation is the charter party, the contract that sits under every fixture. From there the three mainstream structures diverge: the voyage charter, where the owner is paid a freight rate per tonne and keeps the operating risk; the time charter, where the charterer pays hire per day and directs the ship’s employment; and the trip charter, a time charter for a single voyage. The chartering process page traces a fixture from first inquiry to signed recap.
Who it is for and where to start
These pages are written for cargo owners, traders, and operators who need to read a recap, a laytime statement, or a freight idea without guessing at the terms. Each page defines one concept, contrasts it with the terms it is most often confused with, and links to the related clauses.
- New to chartering: read the charter party, then the voyage charter.
- Pricing a voyage: the freight rate and the voyage estimate.
- Where time and money meet: laytime, laycan, demurrage, and dispatch.
- Comparing charter types: spot charter, voyage charter, time charter, and bareboat charter for whole-vessel and single-voyage deals; lump-sum charter when freight is a fixed sum rather than a per-tonne rate; slot charter for buying container capacity rather than chartering a whole ship.
- Trade terms and payment: Incoterms for who charters and who pays freight, the bill of lading for the document that moves with the cargo, and assignment of proceeds for how a seller can raise finance against a letter of credit before the voyage completes.
When you are ready to fix, tell us about your cargo and a broker will respond the same business day.
Back-to-Back Charter
How an operator structures a sub-charter that mirrors the head charter, where the mirroring fails, and why P&I clubs treat the disponent owner as a separate risk from the registered owner.
ExploreBareboat Charter
How a bareboat (demise) charter transfers possession, control, and operational risk of the vessel to the charterer, how BARECON 2017 structures the fixture, and when bareboat chartering makes sense.
Bunker (Marine Fuel)
What bunkers are in shipping: the fuel types VLSFO, HSFO, MGO and LNG, the IMO 2020 sulphur cap, what bunkering means, and who pays for fuel under voyage and time charters.
Charter Party Terms and Clauses
A reference list of the key charter party terms and clauses in dry bulk: laytime, demurrage, dispatch, notice of readiness, laycan, freight, FIO and more, each with a one-line definition and a link to the full page.
Charter Party
What a charter party is, the contract that binds shipowner and charterer. The main types at a glance and the standard forms: GENCON, NYPE, BALTIME and SHELLVOY.
Bill of Lading
What a bill of lading is in dry bulk shipping: its three classic functions, the rights of shipper, carrier and consignee, the types, and freight prepaid versus collect.
Charter Rates
What charter rates mean in dry bulk: time-charter hire quoted in USD per day, what drives the number, what hire includes versus excludes, and how period and trip charters price differently.
Chartering Negotiations
How charter negotiations work in dry bulk: the firm offer, the counter ladder on an accept-or-except basis, fixing on subjects, and the recap.
Consecutive Voyages
How a consecutive voyages charter ties one specific vessel to back-to-back lifts on the same lane, governed by BIMCO's CONSEC form.
Ship Chartering Process
How the ship chartering process works end to end, from enquiry and firm offer through subjects, recap and clean recap to the signed charter party and performance.
Contract of Affreightment
How a Contract of Affreightment (COA) prices a programme of dry bulk lifts at a fixed per-tonne rate without committing either side to a specific vessel.
Dispatch Money
Understanding dispatch money: the reward for completing loading or discharging faster than the allowed laytime.
Demurrage
Guide to demurrage in shipping: what it is, how it's calculated, demurrage rates, and how to avoid demurrage charges.
Ship Chartering FAQ
Answers to common questions about ship chartering: charter types, who pays what, laytime and demurrage, and how a fixture comes together.
FIO / FIOS / FIOST
How FIO terms allocate cargo-handling cost and time in dry bulk. Free in and out, FIOS, FIOST and their variants, contrasted with liner terms where the owner pays.
Fixture Recap
What a fixture recap is in dry bulk chartering: the broker-circulated summary of agreed main terms that binds the parties before the formal charter party is drawn up.
Freight Rate
What a freight rate is in dry bulk shipping: the price of carrying cargo on a voyage charter, quoted in USD per metric ton, and the supply, distance, fuel and port factors that move it.
Incoterms Guide
Incoterms 2020 for dry bulk: the trade term chosen decides who charters the vessel. Under CFR and CIF the seller books the ship, under FOB the buyer does.
Laycan
Understanding laycan in shipping: the laydays and cancelling date range, how it works, and its importance in charter parties.
Loading & Discharge Rates
Guide to loading and discharge rates in dry bulk chartering: how they are quoted, how they feed into laytime, and why they matter for vessel selection and demurrage exposure. Tanker analogues are covered separately under pumping rate warranties and total laytime.
Laytime
Understanding laytime: how loading and discharging time is calculated, laytime clauses, and its connection to demurrage.
Notice of Readiness
Understanding Notice of Readiness (NOR): when it's tendered, requirements, and its role in laytime calculation.
Spot Charter
How spot chartering works in dry bulk. The spot market prices a single voyage at prevailing freight rates, with the Baltic Exchange indices as the reference.
Time Charter
How a time charter allocates costs and risk between owner and charterer, how NYPE 2015 structures the fixture, and when a time charter beats a voyage charter in dry bulk.
Trip Charter
How a trip charter limits a time-charter fixture to a single laden voyage, when it suits a charterer better than a voyage charter, and the risk allocation around redelivery range and bunkers.
Voyage Charter
How a voyage charter works in dry bulk shipping. Owner runs the ship, charterer pays freight per tonne, and laytime governs the clock at both ends.
Voyage Estimate
How a dry-bulk voyage estimate works: the time charter equivalent calculation that decides go or no-go on a fixture, with a worked Panamax coal example.
Port Captain / Ship Agent
What a port agent (ship agent) does in a bulk port call, and how owner's agent, charterer's agent, protecting agent and husbandry agent differ.
Slot Charter
How a slot charter lets a carrier buy TEU capacity aboard another operator's containership under BIMCO SLOTHIRE, who is legally the carrier, and how slot hire, weight allocation, and liability actually work.
Lump-Sum Charter
How a lump-sum charter fixes freight as one total sum for the vessel's capacity regardless of cargo quantity loaded, why deadfreight does not apply, and when it beats a per-tonne voyage charter.
Assignment of Proceeds
What an assignment of proceeds is under a documentary credit, how it differs from a transferable credit, what the assignee actually receives, and where it appears in a bulk cargo sale.