What Is Ship Chartering And How Does It Work? Why Is It So Important?

Ship chartering is a very famous activity that happens in the shipping industry. Mainly shipowners hire professional expert companies for ship chartering. 

In simple words, this important process makes sure that the organisation’s cargoes get delivered safely in the most effective manner. The entire process is divided into three different parts: demise charter, voyage charter, and time charter.     


Ship Chartering


However, this blog points out some of the important topics of ship chartering. At first, you are going to learn how ship chartering works and the second topic would be the reasons behind its importance. 

So are you ready?



As it said ship chartering works in three different parts: demise charter, voyage charter, and time charter. Let's start with the demise part. 



Demise part

It mainly refers to hiring ships without any administration or technical maintenance included as part of the agreement. Most of the expense is borne by the charter. The owner of the ship charter will be responsible for everything if anything happens to the ship. 



The voyage part 

It refers to hiring the ship crew for a voyage between a load port and an unloading port. The shipowner gets paid for every ton(weight) or lump-sum (single large payment) basis. While the shipowners pay only the port costs. 



The time charter 

It precisely means hiring a ship for a fixed time frame, the owner retains management of the ship, but the character has the power to choose in which port to dock the ship will go. It bears all the ship incurs fees. It includes the cost of fuel port charges and daily hiring price to the owner of the ship. 



Why is it so important? 

The ship chartering is important to secure good character contracts so that it can generate more revenue for the company. Additionally, it has more benefits, such as- it understand the contractual provisions, help to learn how to avoid the potential pitfalls in chartering ships, manage the charter party dispute that may create some problems and many more. 

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