Time Charter Equivalent expresses earnings in which unit, regardless of charter type?

• A. Per day.
• B. Per voyage.
• C. Per ton.
• D. Per month.

Answer: (A)

Time Charter Equivalent is about comparing earnings on a common, everyday basis. It converts whatever you earn from different charter types into a daily rate, so you can compare apples to apples across voyage charters and time charters. The idea is to take the total revenue (and adjust for any voyage-related costs and the time the vessel spends in port) and divide by the number of days the vessel was in charter, yielding earnings per day. This per-day unit is what lets you judge whether a voyage charter or a time charter is more profitable on a like-for-like basis. For example, a voyage that brings in 1,200,000 USD over 24 days translates to roughly 50,000 USD per day, a figure you can compare directly to a time-charter rate expressed per day.