Time Charter Period

A specific clause in the charterparty will state the length of the charter period, and this may be expressed in days, months or years, or a combination of them. In recent years it has also become a frequent practice for the period to be expressed as the time required for a specified voyage or a round trip between named ports. For all practical purposes such arrangements are treated as time charters, though the charterer will be in breach if he does not send the vessel on the specified voyage. It is, however, recognised that a vessel’s movements under a time charter cannot be so accurately planned as to ensure that it arrives at the redelivery port on the exact date fixed for the expiration of the charter. Problems inevitably arise, when scheduling the final voyage under the charter, as to whether it will fall short of the time limit (underlap) or exceed it (overlap). The object of the charterer in hiring the vessel is to raise income either by using it in the liner trade or, more frequently, subchartering it for specific voyages. His aim is to design a combination of voyages which will make maximum profitable use of the vessel and still return it to the redelivery port on time. Litigation results whenever there are substantial fluctuations in hire rates and is encouraged by the wide variations in the wording of overlap clauses. When market rates are high, the charterer is keen to make use of every minute of the charter period, whereas the owner is anxious to regain possession of the vessel. When market rates have fallen, the position is reversed. Invariably clauses are inserted into the charterparty to provide for this situation and, in examining such clauses, attention must be paid first to the precision with which the time limit is specified and, secondly, to the rate to be paid for the overlap period.