There are three main types of charter: • A
demise charter, or
bareboat charter, is an arrangement for the hiring of a vessel for which no administration or technical maintenance is included as part of the agreement. The charterer obtains possession and full control of the vessel, along with the legal and financial responsibilities for it. The charterer pays for all operating expenses, including fuel, crew, port expenses and
P&I and
hull insurance. In commercial demise chartering, a subtype of bareboat chartering, the charter period may last for many years and may end with the charterer acquiring title (ownership) of the ship. In that case, a demise charter is a form of
hire-purchase from the owners, who may well have been the shipbuilders. Demise chartering is common for tankers and bulk-carriers. • A
voyage charter is the hiring of a vessel and crew for a voyage between a load port and a discharge port. The charterer pays the vessel owner on a per-ton or a
lump-sum basis. The owner pays the port costs (excluding
stevedoring), fuel costs and crew costs. The payment for the use of the vessel is known as
freight. A voyage charter specifies a period, known as
laytime, for loading and unloading the cargo. If laytime is exceeded, the charterer must pay
demurrage. If laytime is saved, the charter party may require the shipowner to pay
despatch to the charterer. • A
time charter is the hiring of a vessel for a specific period of time. The owner supplies the vessel and crew, but the charterer selects the ports, route and vessel speed, the last being a significant determinant of
carbon dioxide emissions. The charterer pays for all fuel the vessel consumes, port charges, commissions and a daily
hire to the owner of the vessel. The charterer in that sense takes full commercial control of the vessel during the time charter period. The operation of the vessel itself remains with the owner. Variations on those types include: • A
passenger cruiseship charter in which the hiring of a passenger cruise ship in regular service for a limited period of time is exclusively for a private function and uses all accommodations. That is often for business meetings or conferences, music festivals, charity fundraisers or global events such as the Olympic Games. • A
trip time charter is a comparatively short time charter that is agreed for a specified route only, as opposed to the standard time charter for which the charterer is free to employ the vessel within agreed trading areas. • A
bareboat yacht charter (in the
leisure industry, the term "demise charter" is not used) is the short-term hire for only a few weeks or even less. The owner supplies the yacht in
seaworthy order, and it is fully fuelled and possibly revictualled. The yacht may be part of a holiday flotilla and is sometimes crewed by an employee of the owner. At the end of the hire period, the charterers are expected to pay for the fuel that was used. • A
contract of affreightment is not strictly a charter contract but is somewhat similar to a voyage charter. Under a contract of affreightment, the shipowner undertakes to carry a number of cargoes within a specified period of time on a specified route. The agreed frequency of cargoes may require more than one ship. Unlike a true charter, the cargo-owner does not have a laytime period and is not responsible for demurrage. ==Charterers' Liability Insurance==