There are two main types of chartering: time chartering and voyage chartering. In recent years, some other forms have also developed.
①Time Charter
Also known as time chartering, it refers to the way of leasing a ship for a certain period of time, that is, the shipowner (ship lessor) leases the ship to the charterer for use within the specified period, and the charterer dispatches and manages the ship by himself during this period. The lease period can be long or short, from a few months to a few years.
②Voyage Charter, Trip Charter
Also known as voyage chartering or voyage chartering, it refers to the way of leasing a ship by voyage, which is the most active chartering method in the chartering market and the most sensitive to fluctuations in freight levels. Voyage chartering has no fixed routes, fixed loading and unloading ports, and fixed sailing routes, but is stipulated in the voyage charter contract based on the needs of the charterer (cargo owner) and the possibilities of the shareholders after consultation between the two parties. The shipowner is responsible for providing a ship to transport designated goods for one or several voyages between designated ports; the shipowner is responsible for the operation and scheduling of the ship, and the shipowner is also responsible for the operating expenses such as fuel, material, repair, port fees, and fresh water fees; the shipowner is responsible for the crew, and is responsible for the crew’s wages and food expenses.
③ Bareboat charter
Also known as hull charter. This type of charter does not have the nature of contract transportation, it is only equivalent to a property lease. Bareboat charter means that during the lease period, the shipowner only provides an empty ship for the lessee to use, and the lessee is responsible for the crew, supply of supplies, operation and management of the ship, and all fixed or variable operating expenses. In other words, the shipowner will no longer bear any responsibility except for collecting rent during the lease period. Therefore, shipowners who are unwilling to operate a ship transportation business and lack experience in operating and managing ships can also rent out their ships in the form of bareboat charter. Although the profit of such a lease is not high, the shipowner can obtain a fixed rental income, and the recovery of investment is guaranteed.
④ Bareboat Charter Purchase
A bareboat charter purchase contract is a special form of bareboat charter contract, which means that the ship lessor provides the lessee with a ship without crew. During the agreed period, the lessee shall occupy and use the ship only, and transfer the ownership of the ship to the lessee at the end of the agreed period, and the lessee shall pay the lease purchase fee. Bareboat charter purchase is actually equivalent to purchasing a ship in installments. The shipowner has formal ownership of the ship before receiving all payments. The charterer pays each period of rent equal to the installment payment. At the end of the lease, the ship price is paid in full and the ship belongs to the charterer.
⑤ Freight Charter
Also known as the volume contract (some people put it in the fixed-term charter). Freight charter refers to a charter method in which the ship owner uses a certain capacity.
Between certain ports, according to the pre-agreed time, voyage cycle, and each voyage with a relatively equal volume of cargo to complete the total cargo volume. The affreightment charter contract does not specify the name and nationality of the ship, but only stipulates the ship’s class, age and technical specifications. The ship owner only needs to provide the capacity to complete the cargo volume of each voyage specified in the contract in accordance with these requirements. This is very flexible and convenient for the ship owner in scheduling and arranging the ship. The length of the lease depends on the total amount of cargo and the time required for the ship’s voyage cycle.
⑥ Voyage period charter
The voyage period charter is also called date charter. It is a type of transportation with the purpose of completing a voyage, but the rent is calculated based on the number of days used to complete the voyage and the agreed daily rental rate. When the conditions at the loading port and the unloading port are poor, or the navigation conditions of the route are poor, and it is difficult to grasp the time required for a voyage, this type of charter is more beneficial to the ship owner. Because this type of charter can enable the ship owner to avoid the loss of shipping time caused by unpredictable situations that extend the voyage time.