A Voyage Charter is one of the primary, but perhaps most popular forms of chartering a ship, and it’s essentially a contract for the use of an entire ship per voyage.

The Basics
Purpose: The primary purpose of a voyage charter is for shipping cargo from one port to another. The shipowner carries the goods for a fixed price per ton or for a lump sum.
Contract: The contract will detail the specifics of the voyage, including the type of cargo, the designated loading and discharging ports, and a time schedule.
Cost Element: Under the voyage charter, the shipowner bears the operational cost of the voyage, which includes fuel costs, port charges, and crew wages.
Demurrage: This is a key term in a voyage charter, which refers to the compensation paid by the charterer if loading or discharging takes longer than agreed in the terms of the charter. Anything beyond the agreed laytime will be subjected to demurrage.
Dispatch: It’s the opposite of demurrage. It’s a bonus for the charterer if the loading or discharging process is quicker than the agreed laytime.
Freight: This is the main source of income for the shipowner and is usually paid based on the weight or volume of the cargo, once the cargo has been successfully loaded on board or discharged.
Obligations: Both the shipowner and the charterer have specified obligations under the voyage charter. The charterer is responsible for providing cargo, while the shipowner must provide a seaworthy vessel, capable of loading, carrying safely, and discharging the cargo.
Remember, every voyage charter agreement can be different, and the terms mentioned above can depend on the specific agreement between the shipowner and the charterer.
IMPORTANT CLAUSES
1. Description of Vessel and Cargo: This clause details specifics about the vessel like its name, class, tonnage, and any other details that identify it uniquely. The cargo too must be described in terms of the quantity, type, quality, etc.
2. Loading and Discharging Ports: The charter party must specify the ports of loading and discharge. It could stipulate one port or range of ports from where cargo can be loaded or discharged.
3. Freight: This clause outlines the freight rates, and when and how payment should be made. It could be based on weight or volume of cargo and could be payable on shipment or on delivery.
4. Laytime and Demurrage: These clauses specify the timetable for loading and unloading the vessel. Laytime is the time allowed for loading or unloading, whilst demurrage is the compensation payable by the charterer if the vessel is detained beyond this time.
5. Notice of Readiness (NOR): This is a notice given by the master of the ship to the charterer, indicating that the vessel is ready in all aspects to load or discharge the cargo. This starts the laytime clock.
6. Safe Port Warranty: The charterer often has the liberty to direct the vessel to any port. However, they must ensure that the port is safe. If it’s not, they would be liable for the damages to the vessel or crew.
7. Seaworthiness: The owners must ensure the ship is seaworthy, not just at the start of the voyage, but throughout. Failure of this can lead to breach of contract.
8. War Risks and Frustration: This covers any delays or impediments due to war, unrest or other hazards. The charter party can be frustrated due to such reasons.
9. Clauses related to Governing Law and dispute resolution: Charter parties usually include a clause that sets out the law to be applied to the interpretation of the charter and, when applicable, arbitration clauses are included.
Make sure these clauses are clearly defined before entering into a voyage charter as these form the backbone of the contract.
RESPONSIBILITIES
In a voyage charter party, both the Carrier and the Charterer have distinct responsibilities. Here are some key duties of each:
Carrier (or shipowner)
Provision of a Seaworthy Vessel: One of the fundamental duties of the carrier is to provide a ship that is seaworthy, capable of carrying the agreed cargo, and fit for the voyage.
Crew: The carrier is responsible for the management, supply, and costs of the crew, including wages, food, and other provisions necessary for their well-being.
Navigating the Voyage: The carrier arranges for the navigation and management of the vessel, adhering to the agreed route stipulated in the charter party.
Cargo Management: The carrier must reasonably and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.
Charterer (or hirer)
Payment of Freight: The charterer agrees to pay freight – the hire of the vessel, which is typically pre-determined and set out in the charter party. This could be paid in advance, upon loading, or upon discharge of the cargo.
Cargo Supply: It is the charterer’s responsibility to supply the agreed quantity of cargo at the agreed loading port or ports.
Loading and Unloading: The charterer is generally responsible for loading and unloading the cargo, including any costs or fees associated with this. This might include port charges, stevedoring costs, etc.
Demurrage/Despatch: If the charterer exceeds the laytime (the allotted time for loading/unloading), they usually have to pay demurrage to the carrier. Conversely, if they load/unload quicker than agreed, they may be entitled to despatch.
Nomination of Safe Ports: Charterers typically have an obligation to nominate safe ports for loading and discharge, ensuring the safety of the vessel and the prompt delivery of the cargo.
Please note these are general responsibilities and may vary based on the terms and conditions stipulated in the individual charter party agreement. The actual charter party agreement may contain specific rights and obligations that modify or expand these general responsibilities.
Marex Media

BOX 1
Examples of Voyage Charter Party Forms in Use in Various Trades