When a ship is hired for a specific period of time (for example, one year), the charterer pays a daily hire to the owner of the vessel. The same arrangement for the payment of hire is made for trip chartering. Hire is an agreement in which a payment is made for the temporary use of service or property owned by another. Hire is the income derived from a time charter, and it is usually paid every fifteen days in advance.
Hire rate is expressed as dollars per day. Charterers are entitled to make deductions from hire to cover various fees, for example, commissions due to the charterer’s agents or sums advanced by the charterer to cover owners’ expenses at the various ports of call.
Freight is the price paid for the transportation of a certain cargo from one port to another. Freight is the income derived from a voyage charter or from liner operations. The freight rate is expressed in dollars per ton of actual cargo carried.