The hiring out of a ship by its owner to a charterer, in three forms that shift custody, liability and the duty to insure in different ways.
Chartering is the contract by which an owner places its ship at a charterer's disposal, and maritime law distinguishes three forms that share only the name. A bareboat charter hands over the ship without crew or outfit: the charterer becomes the operator, takes on nautical and commercial management, and must buy hull and liability cover itself, which makes it in practice a temporary owner. A time charter provides a manned ship for an agreed period, the owner keeping nautical management and the crew while the charterer directs commercial employment, a split that explains why navigational casualties stay with the first and trading losses with the second. A voyage charter really sells a movement, the owner remaining master of everything, and it is there that laytime and demurrage operate. The problem solved is the separation between owning a capital heavy asset and access to freight, which lets operators without shipping capital run services.
The bulk carrier Wakashio, grounded off Mauritius on July 25, 2020, was owned by the Japanese operator Nagashiki Shipping and chartered by Mitsui OSK Lines: it was the owner, not the charterer, who answered for the pollution under the limitation convention, although the charterer announced about one billion yen in voluntary contributions to Mauritian restoration programs.
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