GlossaryEN1 min readUpdated: Jun 26, 2026
Time Charter Agreement
A time charter agreement is a contract under which the charterer takes commercial control of a vessel for a defined period – from a few weeks to several years – and decides independently on routes, cargo, and scheduling.
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A time charter agreement is a contract under which the charterer takes commercial control of a vessel for a defined period – from a few weeks to several years – and decides independently on routes, cargo, and scheduling. The shipowner retains technical management: crew, maintenance, and hull insurance remain the owner's responsibility. The charterer covers the vessel's running commercial costs – bunkers, port dues, pilotage – and pays the owner an agreed daily hire rate. This distinguishes a time charter from a voyage charter, where the owner undertakes a specific voyage between named ports at a fixed freight rate and bears the commercial employment risk. Time charters are the preferred instrument for container lines, bulk operators, and large commodity traders seeking guaranteed vessel capacity without committing capital to ship ownership.
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