Explain the difference between a voyage charter and a time charter with examples.

• A. Voyage charter covers a specified period; time charter covers a single voyage.
• B. Time charter transfers title to cargo.
• C. Voyage charter covers a single voyage; time charter covers a specified period (e.g., 6–12 months).
• D. Both types involve bareboat operations.

Answer: (C)

The key idea is comparing how long and how the vessel is used. A voyage charter means the owner hires out the ship for a single voyage from a loading port to a discharge port. The freight is paid for that specific trip, and the owner handles the vessel’s voyage costs such as fuel, port dues, canal charges, pilotage, and crew for that voyage. The charterer provides the cargo and pays for loading and unloading, and demurrage or despatch terms may apply if the voyage runs longer or shorter than planned. For example, a trader hires a bulk carrier to transport a specific shipment of coal from Newcastle to Rotterdam at a fixed freight for that voyage; once the ship reaches Rotterdam and offloads, the charter arrangement ends.

A time charter, on the other hand, covers use of the vessel for a set period (for example, six to twelve months). The charterer directs the vessel’s employment during that time and pays a daily hire rate. The owner remains responsible for crewing and general maintenance, while the charterer typically pays ongoing voyage costs such as fuel, port charges, and canal dues, and determines the cargoes and routes to a large extent. For example, a container line charters a vessel for nine months to meet seasonal demand, paying a daily rate; the charterer decides the voyages and cargoes during the period, and covers the operating costs, with the vessel being returned after the period ends.

It’s clear that a voyage charter is tied to one voyage, while a time charter is tied to a period of use. The other options introduce incorrect ideas such as transferring cargo ownership or treating time charters as bareboat, which does not fit how these charter types operate.