Chartering Explained: Time Charter, Voyage Charter, or Bareboat?

My name is Davide Ramponi, I am 20 years old and currently training as a shipping agent in Hamburg. In my blog, I take you with me on my journey into the exciting world of shipping. I share my knowledge, my experiences, and my progress on the way to becoming an expert in the field of Sale and Purchase – the trade with ships.

Whether you're buying, operating, or managing ships, one thing becomes clear very quickly: without chartering, global shipping wouldn’t function. Chartering is the beating heart of the maritime industry—it connects shipowners with cargo owners, ensures ships are put to productive use, and allows both sides to share the risks and rewards of maritime transport.

But what exactly is chartering? What are the main types of charter agreements? And how do they differ in terms of responsibility, risk, and reward?

In this article, I want to provide a clear and structured introduction to chartering—from its basic principles to the specific features of time charters, voyage charters, and bareboat charters. Whether you're new to the topic or looking for a refresher, this post will help you understand the key models and when to use them.

What Is Chartering? The Basics

Let’s start with a simple definition.

Chartering is the process by which a shipowner agrees to lease out the use of their vessel to another party—known as the charterer—under certain terms and conditions for a defined period of time or voyage.

Think of it as renting a ship. Just like you might rent a car for a day, a month, or with or without a driver, a charter arrangement defines how long the charterer can use the ship, what they’re allowed to do with it, and who’s responsible for what.

Key parties involved:

• Shipowner: The legal owner of the vessel.

• Charterer: The party who rents the vessel—this can be a cargo owner, trader, or logistics company.

• Broker: The intermediary who arranges the deal and negotiates the charter party (the contract).

Chartering is flexible and comes in several distinct types—each suited to different operational goals. Let’s explore them.

Time Charter: Hire the Ship, Keep the Crew

A time charter is one of the most commonly used forms of ship chartering. Under this agreement, the ship is hired out for a specific period—say 6 months, 1 year, or even longer.

Key features:

• The shipowner retains responsibility for the crew, maintenance, and insurance.

• The charterer takes over the commercial operation: they decide where the ship goes, what cargo it carries, and when it sails.

• Fuel costs (bunkers), port charges, and canal dues are usually paid by the charterer.

Why choose a time charter?

• Ideal for cargo traders or logistics companies who want operational control without the burden of owning a ship.

• Provides cost predictability over time.

• Useful in volatile freight markets, as rates are fixed for the charter period.

Common use cases:

• Commodity traders transporting bulk goods regularly.

• Liner companies supplementing their own fleet.

• Operators seeking flexibility without full ownership.

Voyage Charter: One Trip, One Contract

A voyage charter is a contract for a single trip between two (or more) ports. The charterer pays the shipowner to transport a specific cargo—e.g., 50,000 tons of coal from Rotterdam to Singapore.

Key features:

• The shipowner provides the vessel, crew, and covers all operational costs—including fuel and port charges.

• The charterer pays a lump sum or per-ton rate for the voyage.

• Loading and discharge responsibilities and laytime (agreed cargo handling time) are clearly defined.

Why choose a voyage charter?

• Perfect for cargo owners with irregular or one-off shipments.

• Low commitment—no long-term vessel exposure.

• Cost is tied to cargo, not time.

Common use cases:

• Grain traders with seasonal shipments.

• Energy companies transporting oil on a per-voyage basis.

• Charterers testing new trade routes before committing to long-term deals.

Bareboat Charter: Full Control, Full Responsibility

A bareboat charter (also called a demise charter) gives the charterer complete control of the vessel—including manning, maintenance, and operation.

Key features:

• The shipowner hands over the ship without crew, stores, or management.

• The charterer becomes responsible for crewing, certification, insurance, and day-to-day operation.

• Often long-term (5–10 years) and may include a purchase option at the end.

Why choose a bareboat charter?

• Allows companies to operate a vessel as if it were their own, without an upfront capital outlay.

• Attractive for startups or growing operators wanting to build a fleet over time.

• Common in sale-and-leaseback arrangements.

Common use cases:

• New shipping companies building experience and market presence.

• Financial institutions leasing out vessels to third-party operators.

• Shipowners looking to offload operational responsibilities.

Comparing the Three Charter Types

Here’s a quick overview of how these charter types differ:

Feature	Time Charter	Voyage Charter	Bareboat Charter
Duration	Fixed period (e.g., months)	One voyage	Long-term (years)
Crew Provided By	Owner	Owner	Owner
Fuel Costs Paid By	Charterer	Owner	Charterer
Operational Control	Charterer	Owner	Charterer
Maintenance & Repairs	Owner	Owner	Charterer
Common Applications	Trading, operations	Spot shipments	Leasing, fleet expansion

Why Chartering Matters

Chartering isn’t just about contracts—it’s about risk allocation, fleet flexibility, and strategic planning.

For shipowners:

Chartering provides revenue without needing to operate commercially themselves. It also enables them to diversify risk by leasing to multiple clients.

For charterers:

Chartering offers access to vessel capacity without the high cost of ownership. It’s a key tool for adapting to market conditions, controlling logistics, and reducing exposure.

For Brokers:

Chartering is a core service offering. Brokers match the right ship with the right cargo, help structure contracts, and negotiate terms that balance the interests of all parties involved.

In short: chartering powers global trade. Every day, thousands of charter agreements are in motion—carrying iron ore from Brazil, containers from Asia, and LNG across oceans.

Final Thoughts: Mastering the Fundamentals of Chartering

Whether you’re aiming to become a sale & purchase expert, a broker, or a future shipping executive—understanding chartering is non-negotiable. Each type of charter comes with different rights, obligations, and strategic benefits.

✅ Time charters offer balance and control for both sides.

✅ Voyage charters suit one-off or price-sensitive shipments.

✅ Bareboat charters provide full operational freedom—but with greater risk.

Knowing when and how to use each charter form is key to building a resilient, profitable maritime strategy.

Are you currently involved in chartering? Which type of charter do you work with most? Share your experiences in the comments—I look forward to the exchange!

---

---