Charter Party
A Charter Party (C/P) is the contract under which a shipowner hires out a vessel to a charterer. The three main types are:
- Voyage Charter: the owner is paid to carry a specific cargo on a specific voyage. The owner bears most operating costs (crew, fuel, port charges).
- Time Charter: the charterer hires the vessel for a defined period, paying a daily hire rate. The owner provides crew and maintenance; the charterer pays for fuel (bunkers) and port charges, and controls commercial operation.
- Bareboat Charter (Demise Charter): the charterer takes the vessel without crew or provisions and operates it as if owner — paying all costs and bearing all risks.
A fourth category, Contract of Affreightment (COA), commits the owner to carry a series of cargoes over a defined period without specifying particular vessels.
Standardised C/P forms include GENCON (voyage), NYPE/BALTIME (time), and BARECON (bareboat). Each defines laytime, demurrage, hire rates, off-hire provisions, war risk clauses, and dispute resolution.
The charter type decides who bears which costs and risks. A voyage charterer simply buys carriage; a bareboat charterer effectively runs the ship. Choose or draft the wrong one and a party is exposed to fuel, crew or off-hire costs it never priced — which is why the charter party is the most scrutinised contract in shipping.
owner runs all
charterer directs,
owner crews
charterer runs all
What is the difference between a voyage and a time charter?
In a voyage charter the owner is paid to carry a cargo on a set voyage and bears the operating costs. In a time charter the charterer hires the vessel for a period, pays a daily rate, directs commercial operation and pays for fuel and port charges, while the owner crews and maintains it.
What is a bareboat charter?
A bareboat (demise) charter hands the vessel over without crew or provisions — the charterer operates it as if the owner, paying all costs and bearing all risks.