Shipping & logistics C/P

Charter party (C/P)

The contract between a shipowner and a charterer governing the use of a ship. Under a voyage charter a specific cargo is carried between named ports at a freight per tonne; under a time charter the ship is hired for a period at a daily rate; under a bareboat charter it is leased without crew. Standard forms include GENCON, NYPE and ASBATANKVOY. Bulk sales contracts should be drafted so that loading rates and demurrage terms are back-to-back with the charter party.

Related terms

Bulk cargo (dry and liquid bulk)

Cargo loaded directly into a ship’s hold or tanks without packaging: grain, coal, iron ore, scrap, fertiliser and cement are dry bulk; crude oil, fuels, vegetable oils and chemicals are liquid bulk. Ship sizes are classed as Handysize (15–35k dwt), Supramax/Ultramax (50–64k), Panamax/Kamsarmax (65–82k) and Capesize (over 100k dwt). Quantity is determined by draft survey or weighbridge and quality by sampling at loading and discharge.

Laytime

The time agreed in the contract during which the charterer or buyer may use the ship to load or discharge without paying extra. It is usually stated as a daily rate, e.g. “5,000 mt per day SHINC” (Sundays and holidays included) or “SHEX” (excluded). Laytime starts after the Notice of Readiness (NOR) is tendered and any agreed turn time has passed. If it is exceeded demurrage is due; if cargo work finishes early, despatch may be earned where agreed.

Freight (freight rate)

The price paid to the carrier for moving goods. Container freight is priced per box (e.g. USD per 40’HC), bulk freight per tonne (USD/mt), and chartered ships by daily hire (USD/day). Surcharges can be added to the base rate: bunker (BAF), currency (CAF), terminal handling (THC), congestion and war-risk surcharges. Freight markets are volatile and are tracked through indices such as Drewry, Freightos (FBX) and the Baltic Dry Index (BDI).

Explained in the trade handbook

Trade handbook