Built for the people who actually fix cargo and tonnage: charterers, owners, operators, traders and the brokers between them. The mechanics of a fixture — enquiry, offer, counters, subjects, recap — are learned on the desk, passed down verbally, and written down almost nowhere in one place. Get a step wrong and you either lose the ship or bind yourself to a contract you didn't mean to make. We assembled the whole flow, the vocabulary and the traps into one reference.
When you're ready to move from theory to a real fixture, the rynda chartering board and the cargo and tonnage boards are where counterparties post and connect.
📖 See also: Laytime & demurrage reference · Ship types & sizes reference · Freight rates & the market reference
Contents
- At a glance
- The cast — who is who
- The four ways to charter a ship
- The fixture flow, step by step
- Main terms vs details
- Subjects — the part that binds you (or doesn't)
- The recap is the contract
- The main-terms glossary
- Freight, cargo-handling and the bill of lading
- Voyage vs time charter economics
- The broker and commission
- Common pitfalls
- Doing it on rynda
- FAQ
- References
At a glance
The short version, if you read nothing else:
- A charter is a contract to use a ship. There are four shapes: voyage, time, bareboat and contract of affreightment (COA) — differing in what the charterer controls and who pays for what.
- A fixture is built by exchanging offers and counters until the main terms are agreed, then "on subjects," then a recap is issued and the subjects are lifted. Only then are you "fully fixed clean" — and bound.
- Any counter kills the previous offer. Change one number, however small, and the other side is free to walk. Offers are firm for a stated validity ("firm for reply by 1600 London") — miss it and the offer lapses.
- No binding contract exists until every subject is lifted. "Sub details," "sub stem," "sub survey" — each is a live escape hatch.
- The recap — the broker's summary of agreed terms — is the contract, even before the formal charter party is typed up. Treat every word of it as binding.
- The single most expensive beginner error is not knowing when you're committed. This reference is mostly about that line.
This is a practical reference, not legal advice. Where the recap and the charter party govern, they govern; consult a shipping lawyer or your P&I club on contract formation questions.
The cast — who is who
| Party | Role |
|---|---|
| Shipowner (owner) | Owns the vessel; offers it for hire or to carry cargo. |
| Charterer | Hires the ship — to move their own cargo, or to trade the ship commercially. |
| Shipper / receiver | The party sending / receiving the physical cargo (may or may not be the charterer). |
| Broker | Intermediary who finds the counterparty and negotiates on a principal's behalf for commission. Owner's broker and charterer's broker often both sit in the chain. |
| Operator | Runs the ship commercially once fixed — bunkers, port calls, voyage orders. |
| Port agent | The owner's/charterer's representative in port; produces the SOF, arranges services. |
In practice most dry-cargo and tanker business flows through brokers. A charterer with cargo and an owner with a ship rarely talk directly at the start — the broker matches them, carries the offers, and drafts the recap.
The four ways to charter a ship
| Type | Charterer gets | Owner keeps | Charterer pays | Owner pays |
|---|---|---|---|---|
| Voyage charter | One (or more) named voyage, cargo carried for a freight rate | Full operational + commercial control of the ship | Freight (per tonne or lumpsum); demurrage if slow in port | Bunkers, port costs, crew, everything |
| Time charter (TC) | The ship for a period, directing voyages within trading limits, for hire per day | Technical/nautical management (crew, maintenance, insurance) | Hire, bunkers, port costs, canal dues | Crew, stores, maintenance, hull insurance |
| Bareboat (demise) | Full possession — crews, maintains and insures the ship as if owner, for a long lease | Legal title only | Everything, plus the lease | Nothing operational |
| Contract of affreightment (COA) | A commitment to move a quantity of cargo over time in several shipments, ships nominated later | Which ships perform | Freight per shipment | Ship operating costs |
The dividing question is who controls the ship and who pays the running costs. Voyage charter: the owner does everything and sells you a delivered cargo movement. Time charter: you rent the ship and pay to run it (bunkers are yours). Bareboat: you effectively become the owner for the term. COA: you lock in volume and price, and sort out the ships as you go.
The fixture flow, step by step
A dry-bulk or tanker fixture typically runs like this:
- Enquiry / order. The charterer (via broker) circulates the cargo: quantity, load/discharge ports, laycan (the arrival window — defined below), cargo type — inviting offers. Owners circulate positions (ship, open date, place) in parallel.
- Offer. One side makes a firm offer on main terms with an explicit validity ("firm for reply 1600 hrs London today"). A firm offer is capable of instant acceptance.
- Counters. The other side counters — accepting some terms, "excepting" (changing) others. This is done "accept / except": everything not excepted is agreed. Every counter rejects the prior offer and puts the ball back.
- On subjects. When the main terms line up, the ship is put "on subs" — provisionally fixed, subject to stated conditions (details, stem, survey…).
- Recap. The broker issues the recap — a single message listing every agreed main term and the outstanding subjects.
- Lifting subjects. As each condition clears, it is lifted. Details are negotiated (often 24–48 h) on the base charter-party form.
- Fully fixed clean. When the last subject is lifted, the fixture is binding — "all subs lifted, fully fixed clean." The formal charter party is then drawn up from the recap.
The emotional whiplash of the desk lives in steps 2–4: an offer firm until 1600 can be accepted, countered, or left to lapse — and a single countered comma resets the clock.
Main terms vs details
Negotiation happens in two layers:
- Main terms — the deal-breakers agreed first: freight or hire rate, laycan, cargo and quantity, load/discharge ports, laytime and demurrage, charter-party form. Agreeing these puts the ship "on subs."
- Details — the remaining charter-party clauses (each carefully worded): war risks, ice, bunkers on delivery/redelivery, off-hire, cargo exclusions, BIMCO clauses (ETS, FuelEU, sanctions). Negotiated after main terms, usually on a named standard form.
A useful rule: main terms decide whether there's a deal; details decide what the deal actually says when something goes wrong. Both bind once subjects are lifted.
Subjects — the part that binds you (or doesn't)
"Subjects" (or "subs") are conditions that must be satisfied before the fixture becomes binding. Crucially, a subject is usually for one party's benefit — only that party can lift, waive or walk on it. Knowing whose subject each one is decides whether it's an exit for you or for them. The common ones (with whose subject it typically is):
| Subject | Whose | Meaning |
|---|---|---|
| Sub details | Both | Subject to agreeing the full charter-party detail clauses. |
| Sub stem | Charterer's | Subject to the cargo being confirmed available (the shipper "stemming" the cargo). |
| Sub survey / vetting | Charterer's | Subject to the ship passing a charterer's or terminal's vetting/inspection. |
| Sub receivers' / shippers' approval | Charterer's | Subject to a third party in the chain approving the ship. |
| Sub board / management approval | Either (whoever named it) | Subject to a principal's internal sign-off. |
Note the asymmetry: four of these five are the charterer's subjects — the owner cannot use "sub stem" or "sub vetting" as an escape hatch. Only "sub details" is genuinely mutual. An owner who assumes any open subject lets them walk can be badly caught out.
The cardinal rule, restated because it costs the most money: no charter party is concluded until all subjects are lifted. A recap covered in un-lifted subjects is not yet a binding contract — but the moment the last one is lifted, it is, on exactly the terms recapped. Owners and charterers both use subjects tactically; know which are yours to lift and when.
The recap is the contract
When main terms are agreed and subjects are being lifted, the broker issues the recap: a structured message reciting freight/hire, laycan, ports, cargo, laytime, demurrage, commission, the CP form and the subjects. It is not a formality — the recap is the contract. If a dispute arises before the formal charter party is signed (and often the formal CP is never signed at all), the recap governs.
Consequences:
- Read every line of the recap as binding wording, not a draft.
- If the recap says "otherwise as per [owner's] pro-forma CP dated…," you have agreed that entire pro-forma — read it.
- Errors in the recap are errors in your contract. Correct them before subjects are lifted.
The main-terms glossary
The vocabulary a recap assumes you already know:
| Term | Meaning |
|---|---|
| Freight | The price to carry cargo under a voyage charter — per metric tonne of cargo, or a lumpsum. |
| Hire | The daily rate to use the ship under a time charter (e.g. "$14,500 daily"). |
| Laycan | Laydays / cancelling: the window in which the ship must arrive and tender NOR (Notice of Readiness). Too early, the charterer needn't take her; after the cancelling date, the charterer may cancel. |
| Cargo quantity | Often "X mt 10 % MOLOO" (more or less owner's option) or MOLCO (charterer's option) — a tolerance on the loaded amount. |
| Load / discharge ports | Named ports or ranges (e.g. "1–2 safe berths, 1 safe port"); "safe port/berth" is a warranty. |
| Laytime | Time allowed for cargo ops before demurrage — see the laytime & demurrage reference. |
| Demurrage / despatch | The overrun charge / the early-finish rebate. |
| DOP / APS | Delivery/redelivery "dropping outward pilot" or "arrival pilot station" (time charter). |
| WWWW | "Wibon, wifpon, wipon, wiccon" — the NOR-validity cluster (see laytime reference). |
| Address commission | Commission deducted by the charterer (a rebate to the charterer's side). |
| Brokerage | Commission paid to the broker(s), a % of freight/hire. |
| Bunkers on delivery/redelivery (BOD/BOR) | Quantities and price of fuel handed over at the start/end of a time charter. |
Master these and a recap reads as plain language instead of code.
Freight, cargo-handling and the bill of lading
Three more mechanics that decide who pays for what — routinely missed by newcomers, routinely fought over by everyone else:
- Freight prepaid vs collect. "Freight prepaid" is due on shipment (before the cargo moves, common in liner/container trade); "freight collect" is due at destination against delivery. It changes who carries the credit risk if the counterparty fails.
- Deadfreight. If the charterer books space but ships less than the agreed quantity, they still pay for the empty space — "deadfreight" compensates the owner for the freight they'd have earned.
- Cargo-handling terms — who loads and discharges. This is a main-term-level cost allocation:
- Gross terms / liner terms — the owner pays for loading and discharging (freight includes it).
- FIO (Free In and Out) — the charterer pays load and discharge.
- FIOST (Free In, Out, Stowed and Trimmed) — the charterer also pays stowage and trimming. Common in bulk.
Get this wrong and a "cheaper" freight rate can quietly saddle you with six-figure stevedore bills.
- Bill of lading (B/L) vs charter party. The charter party governs owner ↔ charterer. The bill of lading is issued when cargo loads and governs owner ↔ cargo holder/receiver (and is the document of title). A B/L often incorporates the charter-party terms by reference — so a receiver can be bound by CP clauses (e.g. arbitration) they never negotiated. Which document controls which relationship is a frequent source of disputes.
Voyage vs time charter economics
The commercial difference is who carries which risk:
- Voyage charter — the owner bears bunkers, port costs and the risk of a slow passage; the charterer's downside is demurrage if they delay the ship in port. The owner's earnings are measured as TCE (time-charter equivalent): freight minus voyage costs, per day. If bunkers spike or the ship is slow, the owner eats it.
- Time charter — the charterer pays hire every day regardless, plus bunkers and port costs, and carries the market risk of the ship being idle or the trade turning unprofitable. The owner has a steady daily income and off-hire protection.
One time-charter mechanic worth knowing because it's the most litigated: withdrawal for non-payment of hire. Hire is paid in advance (e.g. every 15 days); if the charterer pays late, the owner may withdraw the ship. Modern forms (e.g. NYPE 2015) require an anti-technicality notice first — the owner must give the charterer a short grace period (typically a few banking days) to cure the missed payment before withdrawing. Miss the notice and the withdrawal can itself be a breach.
This is why the same ship is worth different things to different people, and why owners and charterers constantly convert between the two via TCE math. Model a voyage's TCE — bunkers, port costs, canal dues, EU carbon, demurrage — in the rynda voyage-economics calculator before you fix, so you know your floor.
The broker and commission
Brokers are the connective tissue of chartering. A broker:
- finds the counterparty (matches cargo to ship / ship to cargo),
- carries offers and counters verbatim between principals,
- drafts the recap and often the charter party,
- is paid brokerage — a percentage (commonly ~1.25 %) of freight, hire or demurrage — plus any address commission to the charterer's side.
"My word is my bond" is the Baltic Exchange motto and it is operative: a broker's firm offer, given on authority, binds the principal. Chains of two, three or more brokers are common; each adds their commission, all recited in the recap. A good broker is not overhead — they are how illiquid, bespoke deals get matched at all.
Common pitfalls
- Countering to "improve" an offer you'd have accepted. A counter rejects the offer; the other side can now walk. If the terms are acceptable, accept — don't tinker.
- Letting an offer's validity lapse. "Firm for reply 1600" means the offer dies at 1601. Reply, extend, or lose it.
- Treating the recap as a draft. It's the contract. Fix errors before subjects lift.
- Not knowing your subjects. Which side lifts "sub stem"? "Sub details"? Un-lifted subjects are exits; misjudging them loses ships or binds you early.
- "Safe port" complacency. It's a warranty — nominating an unsafe berth is a breach with real liability.
- Missing the laycan. Arrive before laydays and the charterer needn't load; miss the cancelling date and they can cancel — sometimes exactly when the market has moved against you.
- Ignoring the detail clauses. Main terms make the deal; the BIMCO war/ice/sanctions/ETS/FuelEU clauses decide who pays when the world changes.
Doing it on rynda
rynda is where the matching and the maths happen before and around the fixture:
- Post and find cargo and tonnage: the chartering board, cargo board, tonnage/vessels board and broker cargo board are where charterers circulate orders and owners circulate positions — the digital equivalent of the enquiry stage.
- Reach a counterparty directly: contact the broker/poster from the offer to move a conversation toward firm terms.
- Know your floor before you fix: model the voyage in the voyage-economics calculator (TCE, bunkers, port costs, EU carbon) and stress the laytime exposure in the demurrage calculator.
- Screen the counterparty and the ship as part of due diligence before committing.
The fixture itself is still a human negotiation — rynda shortens the distance between "who has the cargo/ship" and "what does this voyage actually earn."
FAQ and common confusions
Q: When am I actually bound?
A: When the last subject is lifted and the fixture is "fully fixed clean." Before that, un-lifted subjects generally let either side walk. After that, the recap terms bind you.
Q: I countered and they walked away. Can I accept their original offer now?
A: Generally no — your counter rejected it. The original offer is dead unless they choose to re-offer. This is why you never counter a deal you'd take.
Q: Voyage or time charter — which should I use?
A: Move a specific cargo once and want a delivered price with bunker/passage risk on the owner? Voyage. Want to control the ship's employment over a period and take the market risk yourself? Time. Lock in volume over months? COA.
Q: What's the difference between freight and hire?
A: Freight is paid under a voyage charter for carrying cargo (per tonne or lumpsum). Hire is paid under a time charter for using the ship (per day). Different contracts, different words.
Q: Is the recap legally binding before we sign the charter party?
A: Yes — once subjects are lifted, the recap is the contract, whether or not a formal CP is ever signed. Read it as binding wording.
Q: What does "10 % MOLOO" mean?
A: The loaded quantity may vary ±10 %, at the owner's option (MOLCO = charterer's option). It gives flexibility to load a full, safe cargo without breaching the stated quantity.
Q: What is laycan?
A: The laydays/cancelling window — the agreed range of dates for the ship to arrive and tender NOR. Arrive too early and the charterer needn't start; miss the cancelling date and they may cancel.
Q: How much does a broker cost?
A: Brokerage is typically around 1.25 % of freight/hire (and often demurrage), plus any address commission to the charterer. Multi-broker chains each take a cut, all shown in the recap.
References
- Baltic Exchange — Guide to Modern Shipping: Chartering Negotiations; "My word is my bond."
- BIMCO — standard charter-party forms (GENCON, NYPE, BARECON) and clause library (war, ice, sanctions, ETS, FuelEU).
- Laytime Definitions for Charter Parties 2013 — the laytime vocabulary the recap assumes.
- Standard practitioner texts on fixture formation and "subjects" (consult a shipping lawyer or P&I club for contract-formation questions).
- rynda chartering · cargo · vessels boards, and the voyage-economics calculator.
Document version
- 2026-07 — first public version. The fixture flow, charter types, subjects, the recap and the main-terms vocabulary in one frame. The recap and charter party always govern the specific deal.