Time charter

ILOHC, CEV and other time charter extras

Published 18 October 2026

A time charter is mostly one number, the hire per day. Around it sit a few smaller sums that the charterer pays the owner, or the owner pays the charterer, and that appear in recaps as short forms such as ILOHC and CEV. Each one is charged in its own way: one as a lump sum, one per 30 days, one per voyage. On a tight relet they can be the whole margin, so an estimate needs every one of them on its own line.

ILOHC: in lieu of hold cleaning

A time charter usually says the charterer must redeliver the ship in the same condition as it was delivered. For a bulk carrier that includes clean holds. Cleaning holds takes crew time and, in port, money. So most charters give the charterer a choice: clean the holds before redelivery, or pay the owner a fixed lump sum instead and leave the cleaning to the owner. That sum is the ILOHC, "in lieu of hold cleaning".

Two limits matter. First, the ILOHC is meant for the normal debris and residue of the last cargo. It does not cover a large quantity of cargo left in the holds, for example cargo the receivers rejected. For that, the charterer must pay the owner the real extra cost of cleaning. Second, the ILOHC is about redelivery. Cleaning between cargoes during the charter is a different question, decided by its own clause.

Intermediate hold cleaning

Between two cargoes on the same charter, the holds may need cleaning for the next cargo. Without a clause on this, the owner carries the cost of ordinary cleaning as part of keeping the ship in good order, and the crew helps as part of their normal work. Many charters add a rider clause: the crew will clean between cargoes at the charterer's request, and the charterer pays the owner a fixed lump sum for each cleaning. One reported rider clause set this at 2,000 dollars per operation. Extraordinary cleaning, made necessary by the charterer's choice of cargo, can be a charterer's cost even without such a clause.

CEV: cables, entertainment and victualling

CEV is a sum the charterer pays the owner for the ship's communications ("cables" is the old word), for entertaining officials and agents in port on the charterer's business, and for victualling, meaning meals for the charterer's people, such as supercargoes or surveyors, when they are on board. You will also see it written C/E/V, and some software calls the same line CVE. It is agreed as an amount per month, and in practice it is charged pro rata for the days on hire. Software and charterparty riders use one of three methods:

Method	Daily amount	US$1,500 over 31 days
Per 30 days	rate / 30	1,550.00
Average month	rate x 12 / 365	1,528.77
Calendar month	rate / days in that month	depends on the months

Per 30 days is the simplest and the most common in an estimate. On a 40 day voyage at US$1,500 per 30 days, the CEV is 1,500 x 40 / 30 = 2,000. The amount is small, but it runs every day, like hire.

Extra war risk premium

An owner insures the ship against war risks as part of normal cover. When the ship trades to an area listed by the Joint War Committee (JWC), the insurers charge an additional premium for each call. The BIMCO war risk clauses decide who pays it. Under CONWARTIME for time charters and VOYWAR for voyage charters, the charterer reimburses the owner for the additional premium.

The 2025 editions of both clauses added detail. Insurance costs are now defined as additional war risk premium and additional kidnap and ransom cover taken out for the specific voyage. The owner must tell the charterer about these costs as soon as practicable, if possible before the ship enters the area. On request, the owner must show it used reasonable efforts to get suitable cover and terms. The charterer pays the net cost, so a discount such as a no-claims bonus passes to the charterer. Older charters may use older clauses that share the cost differently, so read the clause in the contract you have.

In an estimate, treat the premium as a lump sum for the voyage, on its own line. It changes fast and the underwriter quotes it per call, so ask for a figure before fixing. Do not take it from the last fixture. See war risk areas for how the listed areas are set.

Ballast bonus, briefly

A ballast bonus is a lump sum the charterer pays the owner to cover the empty voyage to the delivery point, when the ship is far from where the charterer wants it. To the owner it is revenue, not a cost. It has its own guide.

Where each one sits in an estimate

Item	Who pays whom	How it is charged	In the estimate
Hire	Charterer to owner	Per day, every day on hire	Cost, if you have the ship on hire
ILOHC	Charterer to owner	Lump sum at redelivery	Cost, once
Intermediate cleaning	Charterer to owner, if the rider says so	Lump sum per cleaning	Cost, per cleaning
CEV	Charterer to owner	Per 30 days, pro rata	Cost, rate x days / 30
Extra war risk premium	Charterer reimburses owner	Per voyage or per call	Cost, lump sum
Ballast bonus	Charterer to owner	Lump sum	Revenue to the owner

From the owner's side the arrows reverse: ILOHC, CEV and the war risk reimbursement are income, not costs. For a desk that has the ship on hire and lets it out again, they can be both: paid up the chain to the head owner and charged down the chain to the sub-charterer, if the two contracts match. Where they do not match, the difference comes out of the margin.

Why they deserve their own lines

Each of these sums is small next to the hire, so it is tempting to put them all under "other". Do not. They are charged in different ways, and an "other" line cannot change when the voyage gets longer. CEV grows with the days. ILOHC does not. War risk premium depends on the route. If they sit on their own lines, a longer voyage or a new route changes the right numbers by itself.

References

West of England P&I Club, Julien Rabeux, Defence guide: Hold cleaning in a nutshell (time charters), 2026. westpandi.com
Steamship Mutual, Hold cleaning: who bears the cost?, 2005. steamshipmutual.com
Veson Nautical, What are the calculations behind each CVE rate type? help.veson.com
BIMCO, BIMCO adopts reviews of War Risk Clauses, 2025. bimco.org
Nordisk, Vicki Tarbet, Navigating perilous waters: BIMCO updates war risk clauses, 2025. nordisk.no

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. Relet and the margin over hireWhen you pay hire and fix the ship out, the daily figure is your margin over hire, not what the ship earns. Why break-even leaves only a few dollars a day. How to do a voyage estimate, step by stepNine steps from a cargo enquiry to a daily figure, with a worked example, and how to turn the sum round when you know the daily rate you want and need the freight. War risk areasAn insurers’ list of sea areas, not a report of last week’s attacks. What being inside one does to the premium, the crew, the route and the rate. Charterparty formsNobody writes a charterparty from a blank page. People name a printed form, change it, and then disagree about which part of the document applies.

Neptune Atlas

Chartering software for a broking desk, covering the whole cycle: the world merchant fleet, position lists, cargo enquiries, fixtures, laytime and demurrage, and who to write to. Every paid plan starts with 7 free days. A card is needed to start them, and cancelling before they end costs nothing.

Try 7 days free Ship chartering software for brokers What each plan includes