Annual Survey
Inspection of a vessel by a classification society surveyor on behalf of the flag state that takes place every year.
A
Bareboat Charter
Charter of a vessel under which the ship owner is usually paid a fixed amount for a certain period of time, during which the charterer is responsible for the vessel operating expenses, including crewing, and voyage expenses of the vessel, and for the management of the vessel; also known as a “demise charter” or a “time charter by demise.”
Bunker Fuel
Heavy fuel and diesel oil used to power a vessel’s engines.
B
Charter
Hire of a vessel for a limited time or particular voyage to carry a cargo from a loading port to a discharging port.
Charterer
Party that charters a vessel.
Charterhire
Sum of money paid to the ship owner by a charterer for the use of a ship.
Charterparty
Contract for a charter.
Classification Society (or 'Class')
Independent organization that certifies that a vessel has been built and maintained according to the organization’s rules for that type of vessel and complies with the applicable rules and regulations of the flag state and the international conventions of which that country is a member; a vessel that receives its certification is called “in-class”.
C
Dry-docking
Removal of a vessel from the water for inspection and, if needed, repair of those parts below the waterline; required periodically, During dry-dockings, inspections are carried out and relevant certifications issued. Containership dry-dockings are generally required once every five years, one of which must be a “special survey' dry-docking.
D
Flag State
Country of a vessel’s registry.
Forty-foot Equivalent Unit (FEU)
Shipping container measuring 40 feet by 8 feet by 8 feet, capable of carrying twice the volume of a TEU, or twenty-foot equivalent, container.
Freight
Charterhire paid under a voyage charter.
F
Gross Ton
Unit of measurement for the total enclosed space within a ship equal to 100 cubic feet or 2.831 cubic meters.
G
Hire Rate
Payment to the ship owner from the charterer for the use of the vessel.
Hull
Shell or body of a vessel.
H
International Maritime Organization (IMO)
United Nations agency that issues international shipping standards.
Intermediate Survey
Inspection of a vessel by a classification society surveyor that takes place 24 to 36 months after each “special survey.”
I
Newbuilding
New ship under construction or just completed.
N
Off-charter
Period in which a vessel is not in service under a time charter and in which we do not receive hire.
Off-hire
Period in which a vessel is not available for service under a time charter and in which the charterer generally is not required to pay the hire rate. Off-hire periods can include days spent on repairs, dry-docking and surveys.
O
Protection and Indemnity Insurance (P&I or P&I insurance)
Insurance obtained through a mutual association formed by ship owners to provide liability indemnification protection from various liabilities to which they are exposed in the course of their business, and which spreads the liability costs of each member by requiring contribution by all members in the event of a loss.
P
Scrapping
Sale of a ship as scrap metal.
Ship Operating Expense (Opex)
Costs of operating a vessel, primarily consisting of crew wages and associated costs, insurance premiums, management fees, lubricants and spare parts, and repair and maintenance costs; does not include fuel costs, port expenses, agents’ fees, canal dues, extra war risk insurance and commissions, which are included in “voyage expenses”.
Special Survey
Inspection of a vessel by a classification society surveyor every five years, as part of the society's recertification process.
Spot (short-term) Market
Market for immediate chartering of a vessel, usually for single voyages.
S
Twenty-foot Equivalent Unit (TEU)
International standard measure for containers and containership capacity.
Time Charter
Charter under which the ship owner hires out a vessel for a specified period of time; ship owner is responsible for providing the crew and paying vessel operating expenses, while the charterer is responsible for paying the voyage expenses and additional voyage insurance; ship owner is paid the hire rate, which accrues on a daily basis.
T
Voyage Expense
Expense incurred due to a ship’s traveling from a loading port to a discharging port, such as fuel (bunkers) cost, port expenses, agents’ fees, canal dues, extra war risk insurance and commissions.
Vessel Operating Expense
Cost of operating a vessel, primarily consisting of crew wages and associated costs, insurance premiums, management fees, lubricants and spare parts, and repair and maintenance costs.
V