Vessel Charter for Project Cargo: Voyage, Part and Time Charter
When project cargo is too heavy, too large or too many for liner services, we act as your chartering broker: we take the enquiry to shipowners, negotiate the terms and support you from fixture to discharge.
A vessel charter is the hire of a ship, or of space on a ship, from its owner for a voyage or a period, under a contract called a charter party. It is the alternative to booking container slots on a liner service. For project shipments it gives the shipper control of the vessel type, the ports, the loading sequence and the dates, at the price of taking on more planning and more of the commercial risk. CargoMerger does not own vessels; we act as a broker between the charterer and the shipowners.
What is a vessel charter?
On a liner service the shipper books space on a ship that sails on a published schedule, and the contract is the bill of lading under the carrier's terms. In a charter, the shipper or another charterer hires the ship itself, or a defined part of it, and the terms are negotiated in a charter party. The charterer decides, within the contract, where the ship goes and what it loads; the owner remains responsible for the ship, its crew and its seaworthiness. A bill of lading is still issued for the cargo, usually under the charter party, so the shipper has the same document evidence of carriage as on a liner service.
What is our role as a chartering broker?
CargoMerger does not own or operate vessels. We work as a broker: we take your cargo requirements to the chartering market, collect and compare offers from shipowners and operators, negotiate the terms on your behalf and support you until the charter party is signed, and then through loading and discharge. The vessel, its crew and its operation remain the responsibility of the shipowner or operator, and the charter contract is concluded between the charterer and the owner. How the broker is remunerated is disclosed and agreed before a fixture is made. Because we are not tied to any one fleet, the vessel is chosen for the cargo, not the other way round.
Which types of charter exist?
The main forms differ in what is hired and who bears which costs. In a voyage charter the ship is hired for one voyage between agreed ports, the owner pays the running and fuel costs and the charterer pays the freight, which can be a lump sum or a rate per unit of cargo. In a time charter the ship is hired for a period, and the charterer pays the fuel and the port costs in addition to the hire. A contract of affreightment covers the carriage of an agreed volume over a period in several shipments, and a part or space charter hires a part of the ship, such as deck space or one hold, which suits a smaller project that does not need the whole vessel. The right form depends on the size of the project, the frequency of the shipments and how much of the operation the charterer wants to control.
When does project cargo need a chartered vessel?
A charter is considered when liner services cannot do the job. The pieces may be too heavy or too long for the equipment that lines accept, even with out-of-gauge containers; there may be so many pieces that moving them together is more practical than spreading them over several sailings; the origin or the destination may be a port that liner services do not call at, or without suitable cranes; or the schedule of the project may call for control of the dates that a liner schedule cannot give. A charter is not automatically the cheaper or the faster solution, so we compare it with liner and container options on total cost and total risk. For the wider range of heavy and complex moves, see project cargo.
How is the right vessel chosen?
The cargo defines the vessel. For heavy pieces the main criteria are the lifting capacity and outreach of the ship's cranes, the strength and area of the deck, and the size of the hatches and holds. For rolling units, a Ro-Ro vessel with suitable ramps is considered. The draft of the ship has to suit the ports at both ends, and the port itself must have the quay strength, the storage area and, if the ship has no cranes of its own, the shore cranes. Beyond the technical match, the owner and the vessel are checked: the class and flag of the ship, its insurance cover and its record, and the sanctions position of the parties. This vetting is part of the selection, because a failed inspection or a sanctions problem can stop the loading.
- Crane capacity and outreach, deck strength and area, hatch and hold dimensions.
- Draft and the port limits at loading and discharge.
- Class, flag, insurance cover and record of the vessel and its owner.
- Sanctions and compliance position of the vessel, the owner and the parties.
What does a charter involve, step by step?
The process starts with the enquiry: the cargo list with dimensions and weights, the loading and discharge ports, the laycan (the window of dates in which the ship must be ready to load) and the loading and discharge terms. The enquiry goes to the chartering market, offers are compared and negotiated, and the main terms are agreed in a recap before the charter party is signed. Before loading, the ship's details and the stowage and lashing plan are checked, a surveyor may attend, and the ports and agents are nominated. During loading and discharge, the times are recorded in a statement of facts, from which the laytime is calculated. The bill of lading is issued at loading, and the final accounts are settled after discharge.
What are laytime, demurrage and despatch?
Laytime is the time that the charter party allows the charterer for loading or discharging. If the time is exceeded, the charterer pays demurrage, an agreed compensation to the owner for the extra time the ship is kept. If the work is finished early, despatch, a reward for the time saved, can be agreed. These terms exist in container shipping too, but they mean something different there; see demurrage and detention for the container meaning. The practical lesson is the same in both: the readiness of the cargo, the documents and the port is what protects the schedule, and a charter party should be read for its laytime and demurrage terms before it is signed.
Which risks need managing?
Chartering moves risk to the shipper, so it has to be managed. Cargo insurance should be arranged for the full value and the full route, and for high-value cargo the insurer can require a survey or a marine warranty surveyor to approve the stowage and the lashing. Delays to the vessel, weather and the readiness of the port affect the laycan and the demurrage exposure. Claims for cargo damage are dealt with under the charter party and the bill of lading, so their terms and the vessel's insurance cover should be known at the start. We take the vessel and port aspects of these risks into the plan and list the assumptions in the quote.
Main charter types compared
| Charter type |
Suits |
Who bears the main costs |
| Voyage charter |
One shipment between agreed ports |
Owner: running and fuel costs. Charterer: freight and, depending on the terms, loading and discharge |
| Time charter |
A series of voyages over a period |
Charterer: hire, fuel and port costs |
| Contract of affreightment |
An agreed volume carried over a period in several shipments |
Owner: the ship and its operation. Charterer: freight per the contract |
| Part or space charter |
A smaller project that needs deck space or one hold |
Shared with other cargo; freight for the space used |
Documents used in this shipment
- Charter party — the contract for the hire of the vessel or of space on it
- Fixture recap — the summary of the main agreed terms before the charter party is signed
- Cargo list — dimensions, weights and the quantity of each piece
- Stowage and lashing plan — the position of each piece on the vessel and its securing
- Notice of readiness — the master's notice that the ship is ready to load or discharge
- Statement of facts and laytime calculation — the record of times at the port and the resulting demurrage or despatch
- Bill of lading — issued for the cargo, usually under the charter party
- Commercial invoice and packing list — the source of value, number of packages, weights and HS code information
- Export and import declarations — the customs documents at both ports
- Cargo insurance policy — and, where required, the marine warranty surveyor's approval
Frequently asked questions
Do you own the vessels?
No. We act as a chartering broker: we take your enquiry to shipowners and operators, compare their offers, negotiate the terms for you and support the charter until discharge. The vessel and its operation stay with the owner, and the charter party is concluded between the charterer and the owner.
What is a charter party?
A charter party is the contract between the shipowner and the charterer for the hire of a ship or of space on it. It sets the ports, the dates, the freight or hire, the loading and discharge terms and the laytime, and it governs the relationship between the parties. A bill of lading issued for the cargo is usually subject to it.
How long before the shipment should I start the charter process?
As soon as the cargo list and the dates are known. Finding a suitable vessel, negotiating the terms and checking the vessel take time, and the market for suitable ships can be tight. An early enquiry keeps more vessels and more dates available.
Is chartering cheaper than liner shipping?
Not automatically. A charter gives control and suits cargo that liner services cannot take, but the charterer also takes on more of the cost and the risk. The answer comes from comparing both options with every cost on its own line, including loading, discharge, lashing, insurance and port charges.
Can I charter only part of a vessel?
Yes, a part or space charter hires a defined part of the ship, such as deck space or a hold. It suits smaller projects, and the remaining space may be used by other cargo.
What do you need to start a charter enquiry?
The cargo list with the dimensions and weight of every piece, the loading and discharge ports, the dates when the cargo will be ready, the preferred loading and discharge terms if you have any, and any restrictions of the ports or the site.