Time Charter Period

Charterers take the vessel for an agreed period of time, which is typically defined as a number of days or calendar months. The exception to this is what is known as a trip-time charter. This is where the parties use a time charter to cover a single voyage or two or more consecutive voyages between specified areas. The charter party will normally contain an estimate from the charterers as to the likely duration of the trip. The main reason why an owner will prefer to fix his vessel on time charter, rather than voyage charter has to do with the risk of delay, as a result of external causes, to the vessel itself. If the vessel’s voyage from the port of loading to the port of discharge is delayed by bad weather or deviation due to political conflict or obstacles, the risk of such delay is borne by charterers, who must continue to pay hire for the extra time used. The position is opposite under a voyage charter, where the charterer pays a fixed freight irrespective of the ultimate duration of the ocean voyage. It is difficult for charterers to know exactly when they will be able to redeliver the vessel at the end of the charter period. The ship may be delayed by port congestion or bad weather. It is therefore usual to agree a margin, such as ‘minimum 90 – maximum 110 days in charterers’ option’ or ‘20 days more or less’. If no express margin is agreed a margin will normally be implied, unless such implication is excluded by use of a word, such as ‘maximum’.