Charter Party

What Is a Charter Party?

A charter party is a contract between a shipowner and a charterer for the hire of a vessel, either for a specific voyage, a period of time, or the entire ship with crew.

Types of Charter Party Agreements

• Voyage charter: the vessel is hired for a single voyage between specified ports
• Time charter: the vessel is hired for a fixed period, with the charterer directing where it goes
• Bareboat (demise) charter: the charterer takes full operational control of the vessel, including crewing, for an extended period

Why Charter Party Matters

Charter parties are the legal foundation for how bulk and specialized cargo (rather than standard containerized freight, which moves on liner services) gets transported, and the terms of the charter party determine who bears costs like laytime, demurrage, and fuel during the voyage. Understanding which type of charter applies to a shipment clarifies who's responsible for delays and additional costs.