Chartering refers to the leasing of vessels as a means of transportation. Voyage charters are transportation contracts concluded between consignors and shipping companies in a market of tramp shipping and tanker services. Based on this agreement, a shipping company transports cargo from one port to another in single voyage units, and the consignor pays fees according to the actual cargo volume. Voyage charters can be classified into 1) single voyage charters for a single transport voyage, 2) consecutive voyage charters for multiple voyages, and 3) long-term voyage charters. Long-term voyage charters, which developed after World War Two when the market of tramp shipping and tanker services was developing, stipulates that a particular vessel of a signatory shipping company will transport the consignors cargo for a 5 to 10-year period.
Time charters are contracts between ship owners and ship lessees that lease vessels as well as services associated with the vessel. In other words, the ship owner, or lessor, employs the captain and other seamen and leases the vessel with the crew to the lessee for a specified period of time. A consignor may lease a vessel to transport a large amount of cargo for a set period of time, or an operator may want to provide additional marine transportation services. The lessee may freely choose the route and allocate the vessel during the specified period of time. A contracts for the vessel only, without the crew, are called bareboat charters.