What Is a Time Charter? A Shipbroker’s Guide to TC Structures in Dry Bulk
Chartering Guide, Market Insights, Shipbroker Lesson C5TC, NYPE
A Time Charter (TC) is one of the most fundamental chartering structures in dry bulk shipping. Whether you are a cargo owner, a shipowner, or a trader active in iron ore, coal or grain markets, understanding how a Time Charter works — and how a shipbroker fits into the picture — is essential.
At Marcenta Chartering & Shipping Ltd, we act as independent shipbrokers across the Capesize, Handymax and breakbulk segments. This post explains what a Time Charter is, how it differs from a voyage charter, and what role we play as brokers in structuring and negotiating TC agreements.
What Is a Time Charter?
A Time Charter is a contract under which a shipowner places a vessel at the disposal of a charterer for an agreed period of time — ranging from a single voyage trip TC to multi-year period employment. The charterer pays a daily hire rate for the use of the vessel.
Unlike a Voyage Charter — where freight is calculated per tonne of cargo — a Time Charter is based on time. The vessel is essentially “rented” by the charterer for a defined window.
Who Pays for What in a Time Charter?
This is where the TC structure differs fundamentally from a voyage charter:
Shipowner’s responsibility:
- Crew wages and provisions
- Vessel maintenance and repairs
- Hull and machinery insurance
- P&I insurance
Charterer’s responsibility:
- Bunker fuel (VLSFO, MGO)
- Port dues and pilotage
- Cargo loading and discharge operations
- Canal tolls (Suez, Panama)
The Capesize Time Charter Market
In the Capesize segment — vessels of 100,000 DWT and above, primarily used for iron ore and coal — Time Charter rates are tracked via the C5TC: the Baltic Capesize 5 Time Charter Average, published daily by the Baltic Exchange.
The C5TC is a composite of five standard Capesize TC routes and is the primary benchmark used by shipowners, charterers and financial market participants trading FFA (Forward Freight Agreements) on Capesize tonnage.
What Does a Shipbroker Do in a Time Charter?
As independent shipbrokers, Marcenta sits between the shipowner and charterer. Our role in a TC negotiation includes:
- Identifying suitable tonnage — matching the charterer’s trading requirements with available vessels on position
- Negotiating commercial terms — hire rate, delivery and redelivery range, laycan, trading limits, speed and consumption warranties
- Off-hire provisions — agreeing clauses that protect the charterer when the vessel is unavailable
- Charter Party drafting — working from standard NYPE or Baltime forms
- Post-fixture support — managing hire payments, bunker disputes and on-hire/off-hire surveys
Our commission is typically 1.25% of the total hire earned, payable by the shipowner — standard practice in the dry bulk market.
Time Charter vs Voyage Charter
| Time Charter | Voyage Charter | |
|---|---|---|
| Freight basis | Daily hire rate ($/day) | Per tonne ($/tonne) |
| Bunkers | Charterer pays | Owner pays |
| Risk | Charterer takes market risk | Owner takes market risk |
| Typical duration | 1 month to 3+ years | Single voyage |
Related Reading
- Capesize Bulk Carrier Chartering — Marcenta Services
- Dry Bulk Chartering — How We Work
- Baltic Exchange — C5TC Index
- BIMCO — Standard TC Forms
Contact Marcenta
If you are a cargo owner, operator or shipowner looking for independent chartering support in the Capesize or dry bulk segment, we would be glad to assist.
📧 chartering@marcenta.co.uk
🌐 marcenta.co.uk
📍 124 City Road, London EC1V 2NX