A Guide to Understanding the Essential Elements of a Voyage Charter Party

In accordance with Article 92 of China's Maritime Law, avoyage charterparty refers to a contract in which the shipowner provides the charterer with a vessel or part of its cargo space to transport agreed-upon goods from one port to another, and the charterer pays the agreed-upon freight. Voyage charter parties are an important type of maritime cargo transport contract, and shippers typically need to reserve cargo space with the carrier or directly charter the entire vessel, with the vessel sailing from one port to another according to a planned itinerary and route. There are several important characteristics of a voyage charter party that distinguish it from time charter parties, including:

(1)The shipowner is responsible for the vessel and cargo

Under a voyage charter party, the shipowner is often the carrier, responsible for all aspects of the vessel, including ensuring its seaworthiness, proper loading and stowage of cargo. The vessel is owned by the shipowner, and the ship's captain and crew are provided by the shipowner and are responsible for its operation and management. In contrast, under time charter and bareboat charter parties, the shipowner only provides the vessel and crew, while the charterer is responsible for the vessel's day-to-day operation and management.

(2)The voyage charter party typically specifies the contract terms

In a voyage charter party, the transportation contract usually specifies the specific details of the cargo, such as its name, type, quantity, loading and unloading ports, and loading and unloading deadlines. It is similar to a passenger buying a flight from one location to another rather than booking an entire tour group charter. In practice, the shipowner often has more bargaining power in voyage charter party negotiations, and the shipper simply delivers the cargo to the carrier at a specific time and place, with many other details already planned and arranged by the carrier. Therefore, in practice, when shippers make a booking with a carrier, they are usually referring to this type of contract.

(3)The freight is calculated based on the quantity and rate of the goods transported

Under time charter or bareboat charter parties, the shipper pays rent for the entire vessel (including crew), while under a voyage charter party, the charterer (often the shipper) pays only the agreed-upon freight rate for the transportation of the goods, although sometimes the freight is calculated based on the entire transportation cost, such as when the charterer charters or leases the entire vessel.

(4)Cost allocation and responsibility

The charterer may be responsible for costs such as loading, stowing, securing, dunnage, and discharging of cargo, while the shipowner is responsible for operating expenses, fuel, port fees, vessel crew wages, food, maintenance and repair, insurance, inspections, and other costs.

Zhai Dongwei International Trade & logistics Attorney team was founded in 2007. Its founder, Zhai Dongwei, is the founding partner of Guangdong Yingzun Law Firm. Focusing on International trade,maritime affairs, and supply chain cases for more than 16 years, the team currently has more than 30 professional logistics attorneys, of which more than 10 have overseas work and study experience, and can use Chinese, English and French to work and participate in business negotiations.