GlossaryEN1 min readUpdated: Jul 24, 2026

Charter Rate

When oil prices climb or vessel capacity tightens, the effect shows up directly in the charter rate – the price a charterer pays the shipowner for the use of a vessel.

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Last updated: 24 July 2026

Source: https://www.balticexchange.com/en/who-we-are/guide-to-modern-shipping/chartering-.html

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Definition & Explanation

When oil prices climb or vessel capacity tightens, the effect shows up directly in the charter rate – the price a charterer pays the shipowner for the use of a vessel. The charter rate is expressed differently depending on the contract form: as a daily hire in USD per day under a time charter, as a rate per tonne of cargo for a specific voyage under a voyage charter, or as a bare rental for the vessel without crew under a bareboat charter. Its level is driven by supply and demand for tonnage, vessel type and size, route risks and overall market conditions; reference indices such as those of the Baltic Exchange serve as benchmarks. For freight forwarders and shippers, charter rates are a leading indicator: rising rates paid by carriers feed through to ocean freight rates with a time lag, so monitoring bunker prices and rate trends helps plan freight procurement and budgets. Not to be confused with the freight rate, which a shipper pays for carrying an individual consignment – the charter rate concerns the hire of the entire vessel or its capacity.