Common questions about chartering dry bulk and breakbulk tonnage, answered by our desk. For the full definitions behind each answer, follow the links into the ship chartering hub. When you are ready to move a cargo, tell us about it and a broker will respond the same business day.
Common chartering questions
What is ship chartering?
Ship chartering is hiring a vessel, or its cargo space, to move goods by sea. A cargo owner (the charterer) agrees terms with a shipowner under a contract called a charter party, which sets the freight or hire, the cargo, the ports, and who pays for fuel, port costs, and cargo handling. Chartering is how almost all dry bulk and breakbulk cargo moves, because these cargoes are too large or too irregular for scheduled liner services.
What are the main types of charter?
There are three mainstream structures. A voyage charter hires the ship for one defined voyage at a freight rate per tonne, with the owner keeping the operating costs and risk. A time charter hires the ship for a period at a hire rate per day, with the charterer directing where it trades and paying for fuel and port costs. A trip charter is a time charter for a single voyage. Bareboat charter, where the charterer takes the whole ship and crews it themselves, is a separate financing-style arrangement and is rare in spot dry bulk trades.
Voyage charter or time charter: who pays for what?
Under a voyage charter the owner pays for fuel, port charges, and the crew, and the charterer pays a freight rate per tonne of cargo. Under a time charter the split flips: the charterer pays for fuel (bunkers) and port charges and pays the owner hire per day, while the owner still pays for crew, maintenance, and insurance. The choice usually comes down to whether you have a single cargo to move (voyage) or a programme of cargoes and want control of the ship (time).
How is dry bulk freight priced?
Voyage freight is quoted as a rate per tonne of cargo, and it reflects the vessel's daily running cost, the voyage length, bunker prices, port costs, and the balance of ships and cargoes on that lane. Brokers build a voyage estimate that converts a daily vessel cost into a per-tonne freight for the specific cargo and route. Time charter is quoted as hire per day. Published benchmarks such as the Baltic Exchange indices track the market on the main lanes and inform, but do not set, an individual fixture.
What are laytime and demurrage?
Laytime is the time the charter party allows for loading and discharging the cargo, agreed as a number of hours or days or as a tonnes-per-day rate. If the cargo operation runs over the allowed laytime, the charterer pays the owner demurrage, a daily penalty for detaining the ship. If it finishes early, the owner may pay the charterer despatch, usually at half the demurrage rate. Laytime and demurrage are where most chartering disputes arise, which is why the clauses are drafted carefully.
What is laycan?
Laycan is the layday and cancelling window: the range of dates within which the ship must arrive at the load port and tender notice of readiness. If the ship arrives before the first layday, the charterer need not start loading until then; if it has not arrived by the cancelling date, the charterer has the option to cancel the charter. Laycan aligns the ship's arrival with the cargo's readiness, and a tight laycan is a common point of negotiation.
What does a ship broker do, and why use one?
A ship broker connects cargo owners with suitable tonnage, negotiates the freight or hire and the charter party terms on your behalf, and follows the fixture through to completion. A good broker knows which ships are open in the right place at the right time, reads the market so the rate is fair, and structures the clauses so the risks sit where they should. Because the market is opaque and fast-moving, a broker who fixes daily usually secures better terms than an occasional charterer negotiating alone.
What is a charter party?
A charter party is the contract between the shipowner and the charterer. It records the vessel, the cargo, the load and discharge ports, the freight or hire, the laytime and demurrage terms, and how risks such as delay, weather, and war are allocated. Most fixtures start from a standard industry form, such as a BIMCO or other recognised charter party, and amend it with negotiated rider clauses. The signed contract, often summarised first in a fixture recap, governs everything that follows.
How long does it take to fix a vessel?
A straightforward dry bulk fixture can come together in a day or two once the cargo details are firm, because brokers work an active market of open ships. More complex cargoes, tight laycans, or difficult ports take longer to match and negotiate. The earlier you bring the cargo to a broker, the wider the choice of tonnage and the better the rate, so it pays to start the conversation well before the cargo is ready to load.
What is the smallest cargo I can charter a bulk carrier for?
The smallest mainstream ocean-going bulk carrier is the Handysize class, broadly 28,000 to 40,000 deadweight tonnes, so a full cargo for one of those ships is in that range. Smaller parcels can still move as part cargoes shared with other shippers, on smaller coasters and mini-bulkers, or in containers, depending on the commodity and the lane. Tell us the parcel size and we will advise the most economical option.