Ship Chartering Glossary

The terms charterers, brokers and ship operators use every day, explained in plain English.

• Voyage CharterA voyage charter hires a ship to carry a cargo from a loading port to a discharging port for an agreed freight.
• Time CharterA time charter hires a ship for a period of time, and the charterer pays a daily hire and decides where the ship goes within the agreed limits.
• Trip Time CharterA trip time charter is a time charter for a single trip: the ship is hired at a daily rate from delivery at the start of the trip until redelivery at its end.
• Contract of Affreightment (COA)A contract of affreightment, or COA, is an agreement to carry a total quantity of cargo in several shipments over a period at an agreed freight.
• Time Charter vs Voyage CharterThe two main ways to charter a ship differ in what you pay for and who controls the ship. Here is a side-by-side view.
• LaycanLaycan is short for "laydays and cancelling": the first and last date between which the ship must arrive and be ready to load the cargo.
• LaytimeLaytime is the period agreed in a voyage charter during which the charterer may load and discharge the ship without paying anything extra.
• Demurrage and DespatchDemurrage and despatch settle the time a ship spends in port compared with the laytime the charterer was given.
• Notice of ReadinessA notice of readiness, or NOR, is the written message from the ship that it has arrived and is ready to load or discharge. It is the usual start of laytime.
• ChartererA charterer is the party that hires a ship, or space on a ship, to carry a cargo. It is the customer side of a charter.
• Shipowner, ship operator, disponent ownerSeveral companies can stand behind one ship. This page explains who is who: the registered shipowner, the ship manager, the ship operator and the disponent owner.
• Ship brokerA ship broker, or shipbroker, is an intermediary who brings together the two sides of a ship deal and helps them to agree the terms. A chartering broker is the shipbroker who arranges charters.
• Ship fixing and fixtureIn the chartering market "to fix" a ship means to agree the charter. The agreed deal is called a fixture.
• Bulk carrierA bulk carrier is a merchant ship designed to carry loose, unpackaged dry cargo in its holds.
• Deadweight tonnage (DWT)Deadweight tonnage, written DWT, is the total weight a ship can carry when loaded to its maximum safe depth.
• Bill of ladingThe bill of lading is the main transport document of a sea shipment. It is issued by the carrier or the master when the cargo is loaded.
• FreightIn shipping, freight is the payment a charterer or shipper makes to the ship operator for carrying the cargo. The word is also used for the cargo itself.
• Baltic Dry IndexThe Baltic Dry Index, or BDI, is a daily measure of what it costs to move the main dry bulk cargoes by sea. Traders and analysts follow it as a sign of world trade.
• LienA lien is a right to hold property until a debt is paid. In shipping it appears in two main forms: the ship operator's right over the cargo, and a claim that attaches to the ship itself.
• Off-hireIn a time charter the charterer pays hire for every day the ship is at its disposal. Off-hire is the time when the ship is not, and the hire stops.
• BunkersBunkers is the shipping word for the fuel of a ship. Who pays for it, and how the remaining fuel is settled, depends on the type of charter and on the bunker clause.
• FIO and FIOSFIO and FIOS are short terms in a voyage charter. They say who pays for loading and discharging the cargo, and, with the S, for the stowing.
• Cancelling dateThe cancelling date is the last day on which the ship has to be ready to load. If it is not ready by then, the charterer normally has the right to cancel the charter.
• Ton-mileA ton-mile is the work of carrying one tonne of cargo over one nautical mile. It measures the real demand for ships better than the weight of cargo alone.
• Statement of factsA statement of facts, or SOF, is the written log of the events of a ship's call at a port, each with its time. It is the base for the laytime calculation.
• Letter of indemnityA letter of indemnity, or LOI, is a written promise by one party to cover the other for a loss that may come from doing something the contract does not allow.
• Ballast voyageA ship sails "in ballast" when it carries no cargo. It takes water or other weight on board to sail safely, and it is the empty leg that most voyages have.
• Dead freightDead freight is the freight a charterer pays for cargo space it booked in a voyage charter but did not use.
• LighterageLighterage is the carriage of cargo between a ship and the shore by a smaller vessel, called a lighter or a barge, when the ship cannot go alongside a berth.
• Stem"Stem" is a word that brokers use for a slot at a loading terminal and for the cargo that goes with it. It is used in several ways, so the context matters.
• SubjectsSubjects are the conditions that a charter depends on. A ship is "fixed on subjects" when the main terms are agreed, but the deal is not final until the conditions are lifted.

Shipfixing is a digital platform. We are not a ship broker, ship agent or carrier, and we are not a party to any charter.