Bareboat vs Time Charter vs Voyage Charter for Passenger Ships
When you charter a cruise ship, ferry or accommodation vessel, the type of charter decides almost everything else. It sets who hires the crew, who controls the ship, who insures it, who buys the fuel and who pays when something breaks.
The three basic structures are bareboat, time and voyage charters. They come from the cargo shipping world, but they apply to passenger tonnage with some important differences. This guide explains each one in plain terms.
This article is general information, not legal advice. Every charter party should be reviewed by a maritime lawyer.
Bareboat charter (demise charter)
On a bareboat charter, also called a demise charter, the owner hands over the ship itself, with no crew. For the charter period, the charterer takes possession and operational control and acts much like the owner.
The charterer typically:
Appoints the master and crew, directly or through a ship manager
Runs the ship technically and commercially
Pays all operating costs: crew, fuel, stores, port charges, repairs and routine maintenance
Arranges insurance as the contract requires, often hull and machinery in the names of both parties plus P&I cover
The owner typically:
Receives hire, usually monthly in advance
Keeps legal ownership, and often keeps a mortgage on the ship
Has inspection rights and protections around class, flag and returning the ship in agreed condition
Bareboat charters tend to be long-term, often measured in years. Some include a purchase option or a hire-purchase structure. They suit experienced operators who want full control and already have, or can contract, ship management.
Time charter
On a time charter, the owner provides a crewed, operational ship for a set period. The charterer directs where the ship goes and how it is used commercially. The owner keeps responsibility for navigating and running the ship.
The owner typically:
Supplies and pays the master and marine crew
Maintains the ship and keeps it in class
Insures hull and machinery and carries owner's P&I
Is responsible for the ship's seaworthiness and performance as described in the contract
The charterer typically:
Pays daily hire, usually in advance at set intervals
Pays for fuel, port charges and voyage-related costs
Gives employment orders within the agreed trading limits
In passenger trades, the important extra question is who runs the hotel: catering, housekeeping, guest services and entertainment. On a cargo time charter, this question doesn't come up. On a cruise ship, hotel operations can cost as much as the marine side. They may be supplied by the owner, the charterer or a third-party hotel manager, and the contract has to say which.
Time charters can run from a few weeks to several years. They suit charterers who want to control the commercial product without becoming a shipowner-operator.
Voyage charter
On a voyage charter, the owner agrees to perform a specific voyage or series of voyages for an agreed price. The owner keeps control of the ship and pays its operating costs, normally including fuel and port charges. The charterer pays a lump sum or freight rate rather than daily hire.
In passenger shipping, a pure voyage charter is less common than in cargo. The closest equivalents are:
A one-off event or transport sailing, such as moving people between two ports for an event or relocation
A full-ship buyout from a cruise line, where the operator runs a sailing for a single group (see How Much Does It Cost to Charter a Cruise Ship?)
Voyage-style deals suit charterers who need a defined service, not a ship.
Side-by-side comparison
| | Bareboat charter | Time charter | Voyage charter | |---|---|---|---| | Crew | Charterer appoints and pays | Owner supplies and pays marine crew; hotel crew negotiated | Owner | | Operational (nautical) control | Charterer | Owner | Owner | | Commercial employment | Charterer | Charterer, within agreed limits | Owner performs the agreed voyage | | Hull & machinery insurance | Usually charterer, per contract | Owner | Owner | | P&I cover | Charterer (as operator) | Owner; charterer often carries charterer's liability | Owner | | Fuel | Charterer | Charterer | Owner (built into price) | | Maintenance and repairs | Charterer (major items as negotiated) | Owner | Owner | | Payment | Hire, often monthly | Daily hire | Lump sum or freight per voyage | | Typical duration | Long term, often years | Weeks to years | Single voyage or short series | | Who it suits | Experienced operators, investors' lessees, hire-purchase buyers | Cruise and ferry operators, governments, project charterers who want a crewed ship | Event organizers, one-off transport needs |
These are typical allocations. Any of them can be changed by agreement, and passenger contracts often are.
Standard forms: BARECON, NYPE and BALTIME
Charter parties are rarely drafted from a blank page. Commonly used standard forms include:
BARECON, published by BIMCO, which is widely used as the base for bareboat charters
NYPE (New York Produce Exchange form) and BALTIME, used as the base for time charters. BALTIME is a BIMCO form, and current NYPE editions are published jointly with industry bodies including BIMCO.
These forms were developed mainly for cargo ships. Passenger ship charters often use bespoke terms, or heavily amended standard forms, to deal with issues cargo forms don't cover well:
Hotel operations, catering standards and guest-facing service levels
Passenger liability and passenger certification requirements
Public health and sanitation standards
Branding, interior changes and the reinstatement of fit-out on redelivery
Off-hire triggers tied to hotel systems such as HVAC, galley or water production, not just propulsion
Regulatory requirements for the planned trading area and flag
Get these points clear in the term sheet. It is far cheaper than arguing about them after delivery.
How to choose
Start with four questions:
Do you have, or can you contract, a qualified ship manager and crew? If not, a bareboat charter is probably not right for you.
How long do you need the ship? One sailing points to a voyage-style deal. A season points to a time charter. Several years may point to a bareboat charter or a purchase.
Who will run the hotel? Decide this early, because it shapes the hire rate and the contract.
How much operational risk do you want? Moving from voyage to time to bareboat charter means taking on more control, and more risk.
Our Managing Broker, Capt. Ken Caine, is a USCG-licensed Master Mariner and former senior executive at Windstar Cruise Lines during its launch period, which means he reads charter terms from both the bridge and the boardroom.
Current ships offered for charter
FAQ
What is the main difference between a bareboat and a time charter? On a bareboat charter, the charterer crews and operates the ship. On a time charter, the owner supplies a crewed ship and the charterer directs its commercial use.
Who pays for fuel under a time charter? Typically the charterer, together with port charges and other voyage costs.
Can a bareboat charter lead to ownership? Yes, some do. Bareboat charters can include purchase options or hire-purchase terms, if negotiated.
Are BIMCO forms used for cruise ships? They are often used as a starting point. Passenger charters usually need substantial bespoke clauses for hotel operations, passenger liability and fit-out.
Talk to a broker before you sign
Send us your requirements and we will advise on the best charter structure and the ships that fit it:
Type of ship and passengers or berths
Dates and term
Region and delivery and redelivery ports
Budget, and whether you need crew and hotel services
Whether you have a ship manager in place
Capt. Ken Caine, Managing Broker: +1-516-647-5129 (mobile/WhatsApp) · sales@qpsships.comJeff Garcia, Managing Broker, Mediterranean: +1-954-296-9066 · Jeffgarcia@qpsships.com
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