What is a Charter Party?
A Charter Party is a formal contract between a ship owner (or disponent owner) and a charterer for the hire of an entire vessel or its cargo carrying capacity for a specific period of time or voyage. It defines the terms of the ship's employment including freight rates, laytime, demurrage, routing, and the respective responsibilities of each party.
Types of Charter Party
1. Voyage Charter
The vessel is hired for one specific voyage, carrying a defined cargo from one port to another. The ship owner pays operating costs (fuel, crew, port charges). The charterer pays freight per unit of cargo.
2. Time Charter
The vessel is hired for a fixed period of time (months or years). The charterer pays daily hire and operating costs like bunkers and port charges. The ship owner pays crew wages and vessel maintenance.
3. Bareboat Charter (Demise Charter)
The charterer takes full control of the vessel, providing their own crew and paying all operating costs. The ship owner provides only the hull. The charterer becomes the "disponent owner."
