Chartering is the agreement to hire a ship (or space on a ship) to carry cargo. Depending on logistics objectives and shipment frequency, different contract types offer specific advantages.
Main contract types
- Voyage Charter: pay for a specific voyage between designated ports. Predictable costs; carrier manages operations.
- Time Charter: hire the vessel for a period; greater routing flexibility and operational control.
- COA (Contract of Affreightment): multiple liftings over a period; ideal for supply programs.
- Bareboat Charter: "naked" hire without crew/operation; the charterer manages the vessel.
- Slot Charter: rent space on liner ships; ideal for containerized cargo.
When does each fit?
Voyage Charter for one-off or sporadic cargo. Time Charter for continuous availability and control. COA for year-long volume commitments. Bareboat for operators able to manage crew and operations. Slot Charter for containers on liner services.
Choose by balancing volume, frequency, control and cost. Align the contract with your operating profile and risk appetite.
COA: an often underestimated contract
The Contract of Affreightment (COA) is especially valuable for importers or exporters with annual shipment programs. It allows securing capacity and freight rates in advance without the cost of permanent vessel availability. The owner commits to carrying an agreed volume over a period, with flexibility in vessel nomination.
Bareboat Charter: maximum control, maximum responsibility
In a Bareboat Charter (also called demise charter), the charterer assumes virtually all operational aspects: crew, maintenance, insurance and operating costs. It involves the highest transfer of responsibility and is typically used in ship financing or when the charterer has in-house maritime management capability.