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Wednesday, November 18, 2009

A time charter concept explained

What is the difference bewteen a 'time charter' (TC)  and a 'time charter trip' (TCT)?

We know that Time charter means that the charterer pays a daily hire rate for the ship for example usd 10,000 per day. Next step - A time charter can either be for a specific trip (A to B) or for an extended period of time (period time charter)

So there you have it - a TCT is from A to B and usually has very specific and well defined delivery and redelivery areas.

A 'period TC' can be anywhere from 2 months thru to 10 years and by necessity has less well defined delivery and redelivery areas. (I dont know where i will be tomorrow - what hope does a shipowner have prediciting where his ship will redeliver in 3 months time?) When quoting a period order - the estimated duration should always be quoted.

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If when you see a time charter order quoted by a broker - you are unsure if it for a trip or for period then ask the question back to the broker. These days there seems to be some competititon as to who can describe a particular order using as little important information as possible.

Happy fixing

VS

4 comments:

  1. do u have any time charter party brakedown material... summaries of time charter creation inclusive of the clases

    ReplyDelete
  2. Sure

    Send me a private email and I will point you in the right direction.

    Cheers
    VS

    ReplyDelete
  3. Hi,

    can you explain to me why a time-chartered charterer does not merely agree to a higher daily hire rate for the ship

    ReplyDelete
  4. Hi Theresa

    Because a charterer by definition tries to p[ay as little for a ship as possible!

    The more they pay for a ship the less they earn.

    ReplyDelete