Who is a Ship Operator? Ship Operator as freight market practitioner

Ship Operator, can also be used in plural as ship operators – This name rarely appears in a Charter Party except sometimes as a signatory. In a Charter Party, one can only have an owner(s) or charterer(s). A ship operator is someone who is speculating on the direction of the freight market. In shipowning terms, he will ‘charter in’ tonnage at what he hopes are cheap levels before the market rises and/or he will ‘take in’ cargoes under the form of a C.O.A. (Contract of Affreightment) at hopefully higher equivalent levels. In theory, the ships should always have contracts to go in ballast (i.e. empty) to a port of loading and then carry that loaded (we call this ‘laden’) cargo. In practice, vessels go out of position and expected dates of cargo readiness change. So, depending on the size of ship operator (i.e. the number of ships on time charter and number of cargoes under control), the ship operator may come into the freight market either:

1. looking for a vessel from the market that will carry a spare cargo. In this case, if a vessel is ‘chartered in’, then under that relevant Charter Party the operator will become charterer(s) and the true owners of the chartered vessel will be the actual (or ‘head’ or ‘beneficial’) owners; or 2. looking for employment from the market for a spare vessel within his chartered fleet. In any resulting Charter Party, the ship operator who has the vessel on period Time Charter (T/C) (as charterers) becomes the owner(s) for the re-let voyage or Time Charter (T/C) Trip. For the sake of clarity, the ship operators who have become owners are sometimes called ‘Disponent’ or ‘Time Charter’ owners and the original owners, who still own the ship and pay for its upkeep and for the crew, are called ‘Head Owners’ or ‘Beneficial Owners’. These terms are often used in shipping conversations/correspondence and it can become confusing, so it is important to be precise which type of ‘owners’ are meant. Good examples of operators are Cobelfret, Bocimar or Kleimar. Operators can sometimes have limited financial strength, since effectively they are performing a balancing act between chartering in and out. They may be less financially secure than an owner who owns ships or a charterer who owns coal mines. Many operators, however, are very substantial. Some even move into buying vessels (eg Bocimar) – in such a case such operators are sometimes called ‘Owner Operators’.