Voyage charter or time charter?
Both structures provide vessel capacity, but they purchase different things: a voyage charter buys an agreed cargo movement; a time charter buys the vessel's time and transfers more operating decisions to the charterer.
Updated 26 July 2026
The short answer
Under a voyage charter you pay freight, usually per tonne of cargo, and the owner delivers the cargo from A to B. Under a time charter you pay hire per day, you tell the ship where to go, and you pay the running costs of trading her.
Everything else follows from that. The question is not which is better but which risk you would rather hold: the owner's operating risk, priced into a freight rate, or your own exposure to a slow port and a bad market.
Voyage charter
The owner provides the vessel and her crew, and carries the cargo between the agreed ports for an agreed freight. The owner pays for bunkers, port charges and canal dues, and prices all of it into the rate. The charterer's obligation is to provide the cargo and to load and discharge within the laytime allowed.
The commercial risk you keep is the port. If loading takes longer than the laytime you agreed, you pay demurrage. That single clause is where most voyage charter money is won and lost, and it is covered in detail in our laytime and demurrage guide.
Freight is commonly quoted per metric tonne on the intake quantity, sometimes as a lump sum for the whole vessel. Cargo handling costs are allocated by terms such as FIOST, which puts loading, discharging, stowage and trimming on the charterer's account, or gross terms, which leave them with the owner.
Time charter
The owner puts the vessel and crew at your disposal for a period, and you direct her employment within the trading limits agreed. You pay hire, usually per day, payable in advance at fixed intervals, and you pay for bunkers, port charges, canal dues, cargo handling and agency.
The owner remains responsible for the ship: crewing, maintenance, insurance of the hull and classification. If she cannot perform because of a fault on that side, the off-hire clause stops hire running for the period she is unavailable.
A time charter suits a charterer with repeating volume, with cargo whose timing is uncertain, or with a view on the freight market. It also puts a real operational burden on you: bunker stemming, speed and consumption performance, port rotation and the crew's cooperation all become your daily business.
Side by side
| Point | Voyage charter | Time charter |
|---|---|---|
| You pay | Freight, per tonne or lump sum | Hire, per day |
| Bunkers | Owner | Charterer |
| Port charges | Owner | Charterer |
| Cargo handling | Per the terms agreed, often charterer under FIOST | Charterer |
| Delay in port | Charterer, through demurrage | Charterer, through continuing hire |
| Breakdown | Owner | Owner, through off-hire |
| Who directs the ship | Owner, within the agreed voyage | Charterer, within trading limits |
| Suits | A single parcel with a known route | A programme, or a view on the market |
Bareboat and trip charters
- Trip time charter
- A time charter for one voyage rather than a period. You pay hire and the running costs, but only for the duration of the trip. Useful when you want time charter economics without a period commitment.
- Bareboat or demise charter
- The charterer takes the ship without crew and becomes, in practice, her operator: crewing, maintenance, insurance and all. It is closer to a financing or leasing structure than to a freight arrangement, and it is rarely the answer for a cargo owner.
- Contract of affreightment
- An agreement to carry a quantity of cargo over a period in several shipments, with the vessels nominated as the programme runs. It gives a shipper volume security without committing to any one ship.
Choosing between them
One parcel, a route you know, a schedule you need to hold: take the voyage charter and negotiate the laytime carefully. The premium in the freight rate buys you a fixed cost.
Repeating volume, control over routing, or an expectation that the market is going to move against you: look at a time charter or a contract of affreightment. Both need someone on your side who can operate a ship commercially, whether that is your own team or a broker doing it with you.
If you are unsure which fits, describe the cargo and the programme to us and we will tell you what the market would quote on each basis.
Common questions
Which is cheaper, a voyage charter or a time charter?
Neither, reliably. A voyage charter bundles the owner's risk into the freight rate, so you pay a premium for certainty. A time charter is cheaper when the ship performs and the ports work, and more expensive when they do not, because the delay is yours. On a single parcel, most charterers are better off paying for the certainty.
Who pays for bunkers?
On a voyage charter the owner does, and it is priced into the freight. On a time charter the charterer does, along with port charges and canal dues, because the charterer decides where the ship goes.
What is a spot charter?
Spot usually means a single voyage fixed at the prevailing market rate for prompt loading, in other words a voyage charter for immediate business. The distinction people draw between spot and period is about duration and rate exposure, not about the type of contract.
What is off-hire?
A time charter concept. If the vessel cannot perform because of breakdown, deficiency of crew, drydocking or another cause listed in the off-hire clause, hire stops running for that period. There is no equivalent under a voyage charter, where the owner simply carries the delay.
This guide describes general market practice and is not legal advice. The signed contract, charter party and transaction-specific advice take precedence.