Contracts

Voyage charter vs time charter

Published 20 August 2026 · updated 22 September 2026

Every charter settles one question before it settles anything else: who carries the risk that the voyage takes longer than it should. Under a voyage charter that is the owner, paid freight for moving a cargo. Under a time charter it is the charterer, paying hire for every day they hold the ship. Almost every other difference between the two contracts follows from that one line.

Freight per tonne, or hire per day

A voyage charter sells a service: this cargo, from these load ports to these discharge ports, for this money. The owner quotes freight, usually per tonne of cargo and sometimes as a lumpsum for the whole ship, and out of it pays the bunkers, the port charges, the canal dues and the crew. If she burns more fuel than the estimate assumed, or sits a week at anchor beyond the time the charterer was allowed, the owner absorbs it. Run her well and the owner keeps the difference. The charterer’s exposure is the freight, plus whatever demurrage they run up.

A time charter sells the ship. The charterer takes her from delivery to redelivery and pays hire for each day in between, commonly in advance. They direct her employment within limits the contract sets: trading limits, excluded cargoes, safe ports, sometimes a maximum duration for the last voyage. They pay for the bunkers they burn, the ports they send her to and, normally, the handling of their own cargo. The owner keeps the ship herself: crew, insurance, maintenance, stores, class and survey. The master stays the owner’s servant while taking the charterer’s orders on employment.

Notice what the owner has stopped caring about. Hire runs whether she is steaming, waiting for a berth or idle, so port delay is no longer theirs. What they still owe is a ship that works.

Who pays for what

Cost	Voyage	Time	Bareboat
Bunkers	Owner	Charterer	Charterer
Port charges, pilotage, towage	Owner	Charterer	Charterer
Canal dues	Owner	Charterer	Charterer
Cargo handling	Depends on terms	Charterer	Charterer
Crew wages and victualling	Owner	Owner	Charterer
Hull insurance	Owner	Owner	Charterer
Maintenance, stores, class	Owner	Owner	Charterer
Time lost in port	Owner, until laytime is used up	Charterer, hire runs	Charterer
Time lost to breakdown	Owner	Owner, she goes off hire	Charterer

Those are the defaults, and defaults are what a negotiation moves. Cargo handling is the loudest example: on free in and out terms the charterer bears loading, stowing, trimming and discharging, on gross or liner terms the owner bears them, and a freight number means nothing until you know which was quoted. Time charters differ over hold cleaning, war risk premiums and who buys the bunkers on board at delivery. The charterparty in front of you decides it, not the general rule.

Bareboat is a different animal

A bareboat charter, also called a demise charter, is barely a freight contract at all. It is a lease of the asset. The charterer takes possession of the hull, mans her with their own crew, insures her, maintains her and is the operator in every practical sense for the length of the term. Terms run in years, not voyages, and the arrangement is usually financial: one party owns the steel, another trades it, often with a purchase option at the end. Some registries allow a bareboat charterer to fly a second flag for the duration, which is why a hull can appear under one registry in a contract and another on her stern.

Listing bareboat as a third item on the same menu as voyage and time is misleading. The first two are ways to move a cargo, the third is a way to hold a ship, and a desk that meets one is talking about finance rather than freight.

Laytime lives in one world, off-hire in the other

Several terms that sound universal are native to one contract only. Carrying one across is a reliable way to start an argument on a recap.

Term	Belongs to	Why it cannot exist in the other
Laytime	Voyage	The time the charterer is allowed for cargo work before the owner starts losing money. Under time charter they are paying for every day already.
Demurrage and despatch	Voyage	Agreed damages for overrunning laytime, and a reward for beating it. Nothing to compensate when hire runs regardless.
Notice of readiness	Voyage	The trigger that starts the laytime clock. A time charter has delivery notices, which do a different job.
Off hire	Time	Hire stops when the ship cannot do what she was chartered for. A voyage owner is already carrying that delay in the freight.
Speed and consumption	Time	The charterer buys the fuel and the days, so they need a stated performance. A voyage charterer buys a result and does not care how she gets there.

Seaworthiness, deviation and cargo liability under the bills of lading sit on both sides, and how they are shared is one of the harder parts of any charterparty. The voyage or time split does not settle them.

Trip charter and contract of affreightment

Two shapes fill the space between the two. A trip time charter, quoted as a TCT, is hire per day for one defined trip, redelivery on dropping last outward sea pilot at an agreed range. The charterer takes the time risk and buys the bunkers as under any time charter, but the commitment ends when the trip does. Owners use it to reposition into a better area; charterers with one large cargo use it when they would rather run the voyage than buy freight.

A trip is also the bridge between the two markets. Take a voyage’s freight, subtract the voyage costs the owner will pay, and spread the remainder over the days the round takes. That daily figure is the time charter equivalent, and it is the only honest way to hold a freight idea next to a hire rate.

A contract of affreightment is a different hybrid: not one voyage but an undertaking to lift a stated quantity over a period, in shipments spaced by rules the parties agree. The owner nominates a ship for each lifting and each lifting runs on voyage terms with its own laytime and demurrage. A COA shifts volume risk rather than time risk: the charterer secures carriage without committing to a named hull, the owner secures a programme without knowing yet which ship will serve it.

The forms a recap will name

Nobody drafts from scratch. A fixture starts from a printed standard form with a rider of negotiated clauses on top, and the rider is where the real argument lives. On the voyage side, GENCON is the general purpose dry cargo form, while grain, coal, ore and tankers each have long established forms of their own. On the time side, NYPE, the New York Produce Exchange form, and BALTIME are the two names a dry cargo broker hears most, with separate forms for containers, tankers and offshore work. Bareboat has BARECON.

Every one exists in more than one revision, and the year printed on the form changes what the parties agreed, so a recap naming a form with no year and no rider has not recorded the contract. What a given clause says is a question for the version in front of you, and for a lawyer once money turns on it.

Choosing what to propose

A broker holds two things: a cargo and a list of positions. Which contract to put up comes down to which side is more worried about time.

A charterer with a single parcel and no operating staff wants a voyage charter. They are buying a price per tonne and no exposure to how long she takes.
A charterer who can run ships, and expects congestion or a rising market, takes the time risk on a trip or a period because they think they can beat it.
An owner with a ship opening in a weak area often prefers a trip out to a voyage that ends where she started.
An owner who wants certainty takes period hire and gives up the upside for it.
A charterer with a repeated flow on the same route eventually wants a COA rather than going to the market every month.

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Hulls in the register that carry an IMO number and no deadweight on file at all. Freight is quoted per tonne of cargo, so a voyage cannot be estimated for a ship whose intake is unknown. That figure has to come off the position or the particulars before any freight number means anything.

The mechanical work is the same whichever contract is proposed: she has to fit the cargo, be free in the window, be able to reach the load port in time and be acceptable to the charterer’s vetting. The contract shape is the last decision of the four, and it is the one that decides who is out of pocket when the berth turns out to be occupied.

References

BIMCO, GENCON 2022, 2022. bimco.org
BIMCO, NYPE 2015, 2015. bimco.org
BIMCO, BARECON 2017, 2017. bimco.org
BIMCO, CMI, FONASBA and the Baltic Exchange, Laytime Definitions for Charter Parties 2013, 2013. fonasba.com
Steamship Mutual, Speed and performance, FAQs. steamshipmutual.com

Time charter equivalentFreight per tonne means nothing next to hire per day until you divide it by the voyage. This is the arithmetic that does it. How to calculate laytime and demurrageWhere the clock starts, what stops it, how the demurrage figure is actually worked out, and why most claims are lost on the paperwork rather than the merits. Chartering abbreviationsThe abbreviations on a circular, an enquiry and a recap, grouped by where you meet them, and what each one commits you to. The fixture recapThe e-mail that says what was agreed. Written in minutes, read by a tribunal years later, and the contract until the charterparty is drawn. Charterparty formsNobody drafts a charterparty from nothing. They name a printed form, amend it, and then argue about which half of the document wins.

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