Time charter

Ballast bonus

Published 18 October 2026

A ballast bonus is a lump sum that a charterer pays an owner to bring a ship, empty, to where the charter starts. It is common on time charter trips when the ship is open far from the cargo, or when ships are scarce and the charterer has to attract one. The owner works the figure out from the cost and the time of the empty leg. The recap must also say which deductions come off it.

Why it exists

A ship sailing without cargo is "in ballast". It burns fuel and uses days, and on a voyage charter those costs sit in the owner's own estimate. On a time charter, hire usually starts at the delivery point. If delivery is at the load port, the owner does the empty leg for nothing, unless the charterer pays a ballast bonus to cover it. The bonus moves part of the cost of positioning the ship from the owner to the charterer, who is the one that wants the ship in that place.

Two situations make owners ask for one:

The ship is open far away. A ship free in the Far East is offered for a cargo from South America. The ballast leg is long, and no owner gives those days away.
The market is strong. When charterers cannot find ships easily, a bonus is part of the price of getting one.

In a weak market it can go the other way. An owner may pay a bonus to a charterer who redelivers the ship in a better area for its next employment.

Gross or nett

A ballast bonus is paid like freight or hire, through the same brokers, so the parties must agree whether commissions come off it.

Term	What the owner receives
Gross ballast bonus (GBB)	The stated amount, less address commission and brokerage
Nett ballast bonus (NBB)	The stated amount in full, with no deductions
Mixed	For example, nett of address commission but gross of brokerage

A recap line that leaves no doubt reads like this: "Ballast bonus payable with first hire, nett of address commission and gross of brokerage." It is usually paid as a lump sum in advance or with the first hire payment. Unclear wording leaves open whether the bonus is earned when the charter is signed, on delivery or after loading, which is a dispute nobody needs.

How to price it

There is no fixed formula. The owner builds the figure from a voyage estimate of the empty leg:

Fuel. Days at sea in ballast, times the ballast consumption, times the bunker price. Add any waiting at anchor.
Time. The same days, valued at what the ship could earn elsewhere. This is the part owners argue for hardest.
Other costs. Canal tolls, port costs and agency if the leg calls anywhere.

The owner then compares the whole package, hire plus bonus over the total days including the ballast leg, against what the ship would earn on another fixture. A charterer does the same sum from the other side and offers less.

A worked example

A Supramax is open in Singapore. The charterer offers a trip from Brazil at US$15,000 a day, delivery on arrival at the load port. The ballast leg is about 20 days. The figures are illustrative.

Ballast leg, Singapore to the Brazil load port

  Days at sea       20.0
  Fuel              20.0 days x 24 t/day = 480 t
                    480 t x 600 /t                   288,000
  Time value        20.0 days x 15,000 /day           300,000
                                                      -------
  Cost of the leg to the owner                        588,000

Owner asks:   ballast bonus 450,000 gross
              less 5% commissions                     -22,500
              owner receives                          427,500

The owner does not ask for the full 588,000. The time value is what the ship could earn, not a cost the owner pays, and other ships may be closer. The bonus settles where the owner's TCE over the whole trip, including the ballast days, matches what is available elsewhere. That is a negotiation, not a formula.

What each side checks before agreeing

The real distance. Check the ballast leg against a sea distance tool, with the canals the ship may use. A bonus priced on a route through a canal the owner will not take is priced wrong.
Who else is closer. The charterer compares the bonus with ships already nearer the load port. A higher hire rate on a closer ship can cost less than a bonus.
When it is earned. Say whether it is earned on signing, on delivery or on loading, and what happens to it if the charter is cancelled before delivery.
Commission. Gross or nett, written in the recap, and the same on the hire statement.
Redelivery. If the ship is redelivered far from where it was delivered, ask whether a redelivery bonus is due in either direction.

How it shows in an estimate

In a voyage estimate a ballast bonus is revenue, on the same side as freight or hire. The ballast leg's fuel and days stay in the costs and in the voyage days. That way the TCE answers the right question: what the ship earns per day across the whole trip, with the bonus paying for the empty days. If the bonus is gross, take the commissions off it as you would off freight. Leaving the bonus out, or putting it against the costs, makes a distant ship look worse than it is.

See time charter equivalent for the full formula, and delivery and redelivery for where hire starts and ends.

References

Handybulk, Ballast bonus. handybulk.com
Cult of Sea, Ballast bonus (BB). cultofsea.com
Veson Nautical, Time charter out estimates. help.veson.com

Time charter equivalentFreight per tonne cannot be compared with hire per day until you divide it by the voyage. This is the arithmetic that does it. Voyage charter vs time charterHow the two main charter types split the risk, what each side pays for, and which terms exist in only one of them. Delivery and redelivery on a time charterHire starts at delivery and stops at redelivery. Each end fixes a place, notices, the fuel on board and the ship's condition. Bunkers and fuel gradesTwo fuel grades, sometimes three, each with its own price. The largest number on a voyage estimate is also the one nobody guarantees. Position list vs AIS vs port line-upThree things people often mix up in chartering: where a ship is, when it is free next, and what the port authority expects at the berth.

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