A voyage charter is a shipping agreement in which a ship owner carries a specific cargo for a customer on a single trip between agreed-upon ports. Understanding voyage charters helps businesses choose the best way to ship their goods.
How it works
- The ship owner provides the vessel and crew and pays fuel and port fees.
- The customer (the charterer) is responsible for the cargo and pays for loading and unloading.
- The price is usually set per ton of cargo or as a total sum for the trip.
- There’s an agreed time for loading and unloading. If it takes longer, the customer may have to pay extra.
Benefits
Flexibility
Voyage charters offer flexibility, making them ideal for businesses with changing cargo volumes or one-time shipping needs.
Cost-effective
They are cost-effective as you only pay for the space and journey you need without long-term commitments.
Simplicity
The simplicity of clear terms for a single voyage makes planning easier for shippers.
Risk management
Most operational risks are handled by the shipowner, which can be beneficial for less experienced shippers.
Example
A UK-based textile manufacturer needs to ship 500 tons of fabric to China. They use a voyage charter, agreeing to pay £80 per ton, with the vessel loading at Southampton and unloading in Shanghai. This arrangement allows the manufacturer to efficiently transport their large, one-time shipment without committing to long-term shipping contracts.