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Bart⚓️June 15, 2026 at 3:20 AM EDT

1/x An older thread, which I wrote in Dutch, but now translated: A bit of a difficult thread about CHARTERERS. I can’t add many photos or graphs either, because it’s actually very dry material (yeah, I know, I’m selling it well😅). So I’ll just throw in some random photos😆.

2/x What is a charterer? Especially with the Houthi attacks on merchant ships, people sometimes talk about links to Israel, the UK, or the US and then mix up the terms “shipowner” and “charterer”, even though they are not the same person. 3/x Also, as captain and officer, it’s important to know where your “loyalty” should lie. First and foremost, commercially with the shipowner. You have to make sure the owner gets as much profit as possible out of the ship’s operation.

4/x The shipowner is the owner of the ship and makes the cargo space available to transport goods. The cargo owner has cargo and wants to transport it. But who is the charterer? The charterer is basically the renter or lessee of the ship.

5/x If the cargo owner charters an entire ship, he is immediately also the charterer, but usually that’s not the case, especially when the total cargo comes from multiple shippers. (E.g., the ship can load 60,000 tons, but one shipper only has 5,000 tons.)

6/x In that case, the shippers will go through a charterer. The charterer will find a suitable ship for the quantity the shippers want to move. So the charterer is an intermediary between the shipowner and the cargo owner. 7/x The contract between the charterer and the shipowner is called the charterparty. The price the charterer pays the owner is called “freight”… No, not that kind of party.

8/x A charterer can be the actual cargo owner, a freight trading company, someone acting on behalf of the real cargo owner, or someone who specialises in chartering ships for trading cargoes. 9/x Charterers can also belong to a wide range of entities: commodity traders, oil majors, mining companies, grain houses, etc., anyone shipping bulk commodities like coal, iron ore, bauxite, grain, phosphate, or crude oil.

10/x But… as you can see above, the charterer may not always know exactly which ships are available. That’s where the broker comes in, another intermediary between the owner and the charterer. 11/x When a broker successfully arranges a charter party between the charterer and the owner, we call it a fixture. The broker earns a commission (a percentage of the agreed freight).

12/x There are shipbrokers (looking for a ship for a cargo) and cargo brokers (looking for cargo for a ship). Back to the charterparty: it’s a lease/hire contract between the charterer and the shipowner (“owner”). There are three main types of charterparties:

13/x VOYAGE charter, TIME charter, and BAREBOAT charter. But hold on… doesn’t the “carrier” then have no direct relationship with the “shipper”/cargo owner? Yes, he does. The carrier concludes a contract of carriage with the cargo owner. 14/x This contract is governed by the Hague-Visby Rules (international) or COGSA (USA). Note that the Rules mainly apply to the Bill of Lading and the contract with the shipper; charterparties themselves are mostly governed by freedom of contract.

15/x The charterparty (CP) sits on top of the contract of carriage. (This way, even a small cargo owner can still ship goods with a carrier by just using a contract of carriage + Bill of Lading, without needing a full charterparty.) 16/x An important document here is the Bill of Lading (B/L). This is a document issued by the captain (as representative of the carrier) to the cargo owner that essentially does three things: - Acknowledges receipt of the goods 17/x - Serves as evidence that a contract of carriage exists (it is not the contract itself) - Acts as proof of title/ownership of the cargo Point 1 is straightforward; the cargo has been loaded and received. Point 2 also speaks for itself.

18/x Point 3 is crucial: whoever holds the B/L is the legal/physical owner of the cargo. So the captain issues the B/L to the seller, who takes it to his bank. The bank passes it to the buyer’s bank, which then gives it to the buyer.

19/x Payment happens against the handover of the B/L. In the discharge port, the receiver presents the B/L to the ship so the captain knows everything is paid, and he can release the cargo. 20/x Note that in 14/x I spoke of “carrier” and not “shipowner”. That’s because the carrier can also be a demise charterer / disponent owner (not just the actual shipowner). But to explain that, I need to go back to the three types of charterparties: Voyage, Time, and Bareboat.

21/x Oh, wait, first I should mention the two types of ship costs: - Ship operating costs (fixed): crew wages, maintenance & repairs, stores, insurance, etc. - Voyage costs (variable): port fees, canal dues, bunkers/fuel, stevedoring, tank/hold cleaning, etc.

22/x VOYAGE charter: You charter the ship for one voyage. The carrier charters the ship to the charterer to carry an agreed quantity of cargo from port(s) A to port(s) B for a fixed “freight” (lump-sum or per-ton rate). Captain and crew remain employed by the carrier.

23/x Think of it like ordering a taxi, as the passenger, you don’t worry about fuel, maintenance, or the driver’s salary. 24/x TIME charter: You charter the ship for a period of time (weeks to years). Freight is paid as a daily rate. In this type of CP, the carrier pays crew costs and maintenance. The charterer pays fuel and port costs and also appoints the ship’s agents. 25/x As captain, you must keep the ship ready to load, discharge, and sail. Any interruption of this “standby” readiness is called off-hire. During off-hire (e.g., crew change, technical problems, dirty tanks, blackout…), the charterer does not pay the carrier.

26/x And then Bareboat (or Demise) charter: Here, the charterer leases the ship without crew for a period. The charterer takes full responsibility for operating the ship, paying all costs, appointing the crew, and handling management, operation, and navigation.

27/x A bareboat charter can be useful for an owner who wants to expand fleet capacity without building or buying a new ship. He just charters a “bare hull” and can then operate it exactly as he wants. 28/x Things can get complicated here. Nothing prevents a charterer who has taken a ship on bareboat from then sub-chartering it to another party on a time or voyage charter. Layers and combinations can be almost endless.

29/x In all these charterparties, conflicts can arise. Take a voyage charter: the charterer often doesn’t care much how long the voyage takes; he pays a fixed price anyway. Such CPs usually specify laycan (Laydays and Cancelling dates). 30/x The charterer may say the ship must be ready to load between 7–12 July. If the ship arrives early, it may have to wait until the layday starts. If the ship arrives after the cancellation date (July 12), the charterer has the right to reject the ship and find another one. 31/x If freight rates have meanwhile dropped, that’s good for the charterer. If rates have risen and the charterer still wants the ship, he can still use it at the original lower rate; the carrier cannot refuse. The reverse can also happen: 32/x the ship is ready to load, but the cargo isn’t. In that case, the charterer must pay demurrage to the carrier, compensation for lost time. 33/x Anyway, I hope I’ve given you a bit of insight into the world of commercial shipping and shown that just talking about “the owner” is an oversimplification of reality.

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