Voyage Charter

In a voyage charter the shipowner agrees to carry a stated cargo from one place to another for an agreed payment, and keeps full operational control of the ship while doing so. The owner mans, maintains, insures and navigates the vessel, and pays the running costs of the voyage including bunker fuel, port charges and canal dues. The charterer, in effect, buys a transport service for a particular parcel of cargo rather than the use of the ship for a period, which makes the voyage charter the natural choice for a shipper with a specific cargo to move.

Payment is by freight, usually expressed as a rate per tonne of cargo carried or occasionally as a lump sum for the whole voyage. Because the owner bears the cost of time spent on the voyage, the contract must control how long the charterer may take to load and discharge, and this is where laytime and demurrage come in. The charter allows the charterer a defined laytime for cargo operations; if that time is exceeded the charterer pays demurrage to compensate the owner for the delay, and if operations finish early the owner may pay despatch. The notice of readiness, the statement of facts and the laytime calculation are the practical machinery for settling these amounts.

A voyage charter therefore splits the risks in a characteristic way. The owner carries the risk of the ship's performance and the cost of running it, including the danger that a slow passage or engine trouble eats into the margin, while the charterer carries the risk of delay in port through laytime and demurrage and the market risk on the freight rate agreed. Standard forms such as GENCON provide the framework, heavily amended by negotiated clauses on safe ports, cargo responsibilities and exceptions, and the voyage charter remains the dominant contract in the dry-bulk and tanker spot markets.