Glossary
Tanker chartering terms, explained
152 terms from recaps, charter parties and market reports, each in plain English with an example from a tanker desk.
A
- Additional war risk premiumAWRPAdditional war risk premium (AWRP) is the extra insurance cost charged for each call to, or transit through, an area listed as high risk by war underwriters.
- Address commissionAddress commission is a percentage of the freight or hire that the owner pays back to the charterer, effectively a discount on the rate.
- AframaxAn Aframax is a tanker of about 80,000 to 120,000 deadweight tonnes, carrying around 600,000 to 750,000 barrels, common in short and mid-haul crude trades.
- All fastAll fast is the moment the ship is securely moored at the berth, the last mooring line made fast, often used as a trigger for laytime.
- Always afloatAAAlways afloat (AA) means the ship must be able to stay afloat at all states of the tide at the berth or place it is ordered to.
- Arrived shipAn arrived ship is one that has reached the point named in the charter where it can tender a valid notice of readiness and start the laytime process.
- ASBATANKVOYASBATANKVOY is the most widely used standard voyage charter party form for tankers, published by the Association of Ship Brokers & Agents (USA).
B
- Bab-el-MandebBab-el-Mandeb is the strait between Yemen and the Horn of Africa connecting the Red Sea to the Gulf of Aden, on the route to and from the Suez Canal.
- Ballast legThe ballast leg is the empty voyage a tanker makes to reach its next load port, carrying sea water as ballast instead of cargo.
- Ballast water managementBallast water management rules require ships to treat ballast water before discharging it, to stop invasive marine species spreading between regions.
- Baltic ExchangeThe Baltic Exchange publishes daily freight assessments for benchmark tanker routes, such as TD3C, which the market uses as reference rates.
- Bareboat charterBBCA bareboat charter leases the ship itself; the charterer supplies the crew, runs and maintains it, and is treated almost as the owner for the term.
- BeamBeam is the ship's width at its widest point, which matters for canal locks and some berths.
- Berth charterA berth charter is one where the ship only becomes an arrived ship once it reaches the berth, so waiting time for a berth is at the owner's risk.
- Bill of ladingB/LA bill of lading (B/L) is the document issued for cargo loaded on a ship: a receipt, evidence of the carriage contract and a document of title.
- BPVOYBPVOY is BP's standard tanker voyage charter party form, used for BP's own fixtures and by some other charterers.
- Brokerage commissionBrokerage commission is the fee owners pay the brokers who arranged the fixture, a percentage of freight, deadfreight and demurrage.
- BunkersBunkers are a ship's fuel, mainly very low sulphur fuel oil (VLSFO), high sulphur fuel oil (HSFO) for scrubber-fitted ships, and marine gasoil (MGO).
C
- Cape of Good HopeThe Cape of Good Hope route takes ships around southern Africa instead of through Suez, the standard path for laden VLCCs between Asia and the West.
- Cargo heatingCargo heating keeps heavy or waxy cargoes, such as fuel oil and some crudes, warm enough to stay pumpable during the voyage and discharge.
- Cargo manifestA cargo manifest is the summary of all bills of lading issued for the cargo on board, required by customs at the discharge port.
- Cargo orderA cargo order is a charterer's request for a ship: cargo grade and quantity, load and discharge ports, laycan and the terms sought.
- Cargo shortageA cargo shortage is a difference between loaded and discharged quantities; many tanker charters let charterers deduct losses above 0.5%.
- Cargo toleranceCargo tolerance is the allowed variation in cargo quantity, such as 5% more or less in owners' option (MOLOO) or in charterers' option (MOLCO).
- Certificate of qualityA certificate of quality records the tested specification of a cargo, such as density, sulphur and water content, usually from an independent inspector.
- Charter partyC/P or CPA charter party is the contract between shipowner and charterer for the hire of a ship, usually a standard form amended by riders and the fixture recap.
- CIICarbon Intensity IndicatorCII (Carbon Intensity Indicator) is the IMO's yearly A-to-E rating of a ship's operational CO2 emissions per unit of transport work.
- Clean tankerA clean tanker carries refined clean products such as gasoline, naphtha, jet fuel and diesel, usually with coated tanks to protect cargo quality.
- ContangoContango is when future oil prices are higher than today's price; the opposite, backwardation, is when future prices are lower.
- Contract of affreightmentCOAA contract of affreightment (COA) commits an owner to carry a series of cargoes over a period, without naming the ship for each one in advance.
- Counter-offerA counter-offer is a reply that changes the terms of an offer; it rejects the original offer and becomes a new offer the other side can accept.
- Crude oil washingCOWCrude oil washing (COW) cleans a crude tanker's cargo tanks during discharge by spraying them with the cargo itself to dislodge residues.
D
- DeadfreightDeadfreight is compensation the charterer pays when it loads less cargo than it agreed to supply, for the unused space it reserved.
- DeadweightDWTDeadweight (DWT) is the total weight a ship can carry, cargo plus fuel, water, stores and crew, at its maximum permitted draft, in tonnes.
- DemurrageDemurrage is the agreed daily amount the charterer pays the owner for every day the ship is kept in port beyond the laytime allowed.
- Demurrage time barA demurrage time bar is the deadline, usually 90 days after discharge, by which the owner must present a fully documented demurrage claim.
- DespatchDespatch is money the owner pays back to the charterer for finishing cargo operations faster than the laytime allowed.
- DeviationDeviation is departing from the agreed or customary route of the voyage, which is only allowed for reasons the charter or law permits.
- Dirty tankerA dirty tanker carries crude oil or dirty petroleum products such as fuel oil, which can't follow straight into a clean product without major cleaning.
- Double hullA double hull is an inner and outer shell around a tanker's cargo tanks, required for oil tankers under MARPOL to reduce spills after grounding or collision.
- DraftDraft (or draught) is the depth of the ship below the waterline. It limits which ports, berths and canals a laden tanker can use.
E
- ECAEmission Control AreaAn emission control area (ECA) is a sea area where ships must burn fuel with no more than 0.10% sulphur, or use a scrubber, under MARPOL Annex VI.
- EEXIEnergy Efficiency Existing Ship IndexEEXI is the IMO's one-off technical efficiency standard for existing ships, in force since 2023, often met by limiting engine power.
- EU ETSEU Emissions Trading SystemThe EU ETS requires shipping companies to buy and surrender carbon allowances (EUAs) for CO2 emitted on voyages to, from and within the EU.
F
- Failed fixtureA failed fixture is one that collapses before subjects are lifted, for example because vetting or the charterer's management does not approve.
- Firm offerA firm offer is a binding offer open for acceptance for a set time; if the other side accepts in time and without changes, the deal is made.
- FixtureA fixture is a concluded charter: the ship has been “fixed” once owner and charterer have agreed all main terms and lifted any subjects.
- Flat rateThe flat rate is the Worldscale reference freight in US dollars per tonne for a specific route, equal to WS 100, published once a year.
- Floating storageFloating storage is using a tanker to hold oil at sea, usually when future oil prices are high enough above spot prices to cover the charter cost.
- Forward freight agreementFFAA forward freight agreement (FFA) is a cleared derivative that lets owners and charterers hedge future freight rates against a Baltic benchmark route.
- Free pratiqueFree pratique is the port health authority's clearance that the ship is free of infectious disease and may enter port and contact the shore.
- FreightFreight is the payment a charterer makes to the owner for carrying cargo under a voyage charter, quoted per tonne, as a lumpsum or in Worldscale.
- Freight earned on loadingFreight earned on loading means the owner has earned the full freight once the cargo is loaded, even if it is later lost, and it is not returnable.
- Freight taxFreight tax is a tax some countries levy on freight earned by foreign shipowners for cargo loaded or discharged in their ports.
- FuelEU MaritimeFuelEU Maritime is an EU rule, in force since 2025, that caps the greenhouse gas intensity of energy ships use on EU voyages and tightens over time.
H
- Half demurrageHalf demurrage is a reduced rate, half the agreed demurrage, that many tanker charters apply to delays from causes outside either party's control.
- Handysize tankerA Handysize tanker is a small product or chemical tanker of roughly 10,000 to 40,000 deadweight tonnes, used on short-sea and regional trades.
- HireHire is the payment for a ship under a time charter, normally a fixed amount per day, paid in advance at regular intervals.
- Hull and machineryH&MHull and machinery (H&M) insurance covers physical loss of or damage to the ship itself, such as from collision, grounding or machinery breakdown.
I
- IMO 2020IMO 2020 is the global limit, in force since 1 January 2020, of 0.50% sulphur in ship fuel outside emission control areas.
- IndicationAn indication is a non-binding signal of the rate or terms a party might accept, used to test the market before firm offers are made.
- Inert gas systemIGSAn inert gas system (IGS) fills a tanker's cargo tanks with low-oxygen gas so the hydrocarbon vapours above the cargo cannot ignite.
L
- Laden legThe laden leg is the part of a voyage when the tanker is carrying cargo, from the load port to the discharge port.
- Last doneLast done is the rate of the most recent comparable fixture on a route, used as the starting point for negotiating the next one.
- Last three cargoesL3CLast three cargoes (L3C) are the grades a tanker carried on its three previous voyages, checked by charterers to judge contamination risk.
- LaycanLaydays / cancellingLaycan is the window of dates in which the ship must arrive and tender notice of readiness, ending with the charterer's right to cancel.
- LaytimeLaytime is the time the charterer is allowed, without paying extra, to load and discharge the cargo under a voyage charter.
- Laytime statementA laytime statement is the calculation that sets out laytime allowed, time used at each port, exceptions and the resulting demurrage or despatch.
- Letter of indemnityLOIA letter of indemnity (LOI) is a charterer's promise to compensate the owner for any loss from delivering cargo without original bills, or at a changed port.
- Letter of protestLOPA letter of protest (LOP) is a formal written complaint from the master or terminal recording a problem, such as slow pumping or a cargo discrepancy.
- Lifting subjectsLifting subjects means confirming that the conditions attached to a fixture are satisfied, turning it into a clean, binding fixture.
- LighteringLightering is transferring part of a large tanker's cargo to smaller ships so it can enter a port too shallow for it fully laden.
- LOALength OverallLOA (length overall) is the ship's maximum length from bow to stern, checked against berth and lock limits.
- LOOPLouisiana Offshore Oil PortLOOP (Louisiana Offshore Oil Port) is the only US port that can load and discharge fully laden VLCCs directly, via offshore single point moorings.
- LR1Long Range 1An LR1 is a long range product tanker of about 55,000 to 80,000 deadweight tonnes, roughly Panamax size, used for clean products and some crude.
- LR2Long Range 2An LR2 is a long range product tanker of about 80,000 to 160,000 deadweight tonnes, typically Aframax-sized with coated tanks for clean products.
- Lumpsum freightLumpsum freight is a single fixed amount for the whole voyage, regardless of how much cargo is actually loaded within the agreed range.
M
- Main termsMain terms are the key commercial points of a fixture (ship, cargo, ports, dates, rate, demurrage and the CP form) agreed before the details.
- Malacca StraitThe Malacca Strait between Malaysia and Sumatra is the main route from the Indian Ocean to East Asia, used by most Gulf to China tanker voyages.
- MARPOLMARPOL is the IMO's International Convention for the Prevention of Pollution from Ships, covering oil, chemicals, sewage, garbage and air emissions.
- MEGMiddle East GulfMEG (Middle East Gulf), also written AG (Arabian Gulf), is the market name for the Persian Gulf load region, the largest source of seaborne crude.
- MR tankerMedium RangeAn MR (medium range) tanker is a product tanker of about 25,000 to 55,000 deadweight tonnes, the most common size for gasoline, diesel and jet fuel.
N
- Narrowing the laycanNarrowing the laycan means the charterer shortening a wide laycan window, as the charter allows, to a firmer arrival window closer to the date.
- Notice of ReadinessNORA notice of readiness (NOR) is the master's formal notice that the ship has arrived and is ready in every respect to load or discharge.
- Notice timeNotice time is the waiting period, often six hours, between tendering a notice of readiness and laytime starting to count.
O
- Off-hireOff-hire is a period when a time-chartered ship cannot work as required, such as during a breakdown, so the charterer stops paying hire.
- Once on demurrage, always on demurrageOnce on demurrage, always on demurrage means that after laytime expires, laytime exceptions stop applying and demurrage runs continuously.
- Open dateA ship's open date and open port are when and where it will finish its current employment and be free to load its next cargo.
- OverageOverage is the extra cargo insurance premium charged when a ship is older than an underwriter's age limit, usually 15 or 20 years.
P
- P&I clubProtection & IndemnityA P&I (protection and indemnity) club is a mutual insurer covering shipowners' third-party liabilities, such as cargo claims, pollution and crew injury.
- Panama CanalThe Panama Canal links the Atlantic and Pacific; its Neopanamax locks take ships up to about 15 metres draft, which rules out laden VLCCs.
- Port charterA port charter is one where the ship becomes an arrived ship on reaching the port's usual waiting area, so berth waiting time falls on the charterer.
- Port disbursement accountPDA / FDAA port disbursement account lists a port call's costs (dues, pilotage, towage, agency) as a proforma estimate (PDA) and final bill (FDA).
- Port state controlPSCPort state control (PSC) is the inspection of foreign ships in a country's ports to check they meet international safety and pollution rules.
- Position listA position list is a broker's list of ships open in a region, showing where and when each one will be available for its next cargo.
- Private and confidentialP&CPrivate and confidential (P&C) means the fixture's rate or details are not to be reported to the market by the brokers involved.
- Pumping warrantyA pumping warranty is the owner's promise that the ship can discharge its full cargo within a set time or maintain a set pressure at the manifold.
R
- RecapA recap is the broker's written summary of every term agreed in a fixture negotiation, which becomes the core of the charter party.
- ReletA relet is a ship offered to the market by a charterer who already has it on time charter, so the charterer acts as the disponent owner.
- Remaining on boardROBRemaining on board (ROB) is cargo left in a tanker's tanks after discharge; on-board quantity (OBQ) is residue already in the tanks before loading.
- Reversible laytimeReversible laytime means the hours allowed for loading and discharging are added together, so time saved at one port can be used at the other.
- Rider clausesRider clauses are additional clauses attached to a standard charter party form that amend it or add terms the printed form doesn't cover.
- Running hoursRunning hours means laytime counts continuously, hour by hour, around the clock, subject only to the exceptions written in the charter.
S
- Safe portA safe port is one the ship can reach, use and leave without being exposed to danger that good seamanship can't avoid; charterers usually warrant it.
- Sanctions clauseA sanctions clause allocates the risk of sanctions: the owner can refuse orders exposing the ship to sanctions, and the charterer warrants it will not give them.
- ScrubberA scrubber (exhaust gas cleaning system) removes sulphur from a ship's exhaust, letting it burn cheaper high sulphur fuel oil while staying compliant.
- ShellvoyShellvoy is Shell's standard tanker voyage charter party form, widely used beyond Shell and generally seen as more detailed than ASBATANKVOY.
- SHEXSundays and Holidays ExceptedSHEX means Sundays and public holidays do not count as laytime, even if cargo is worked on those days, unless the charter says time used counts.
- ShiftingShifting is moving the ship from anchorage to berth or between berths; under most tanker charters the shifting time does not count as laytime.
- SHINCSundays and Holidays IncludedSHINC means laytime keeps running on Sundays and public holidays, so every day counts as laytime unless something else excludes it.
- Ship-to-ship transferSTSA ship-to-ship (STS) transfer moves cargo directly between two tankers moored alongside each other, at anchor or under way, instead of via a terminal.
- SIREShip Inspection Report ProgrammeSIRE is OCIMF's Ship Inspection Report Programme: standardised tanker inspections whose reports are shared with oil companies for vetting.
- SlopsSlops are the oily water mixtures from tank washing and cargo residues, collected in a tanker's slop tanks for disposal or for loading on top.
- Speed and consumption warrantyA speed and consumption warranty is the owner's promise on a time charter that the ship can steam at a stated speed on a stated daily fuel consumption.
- SPMSingle Point MooringA single point mooring (SPM) is an offshore buoy a tanker moors to and loads or discharges through, connected to shore by subsea pipelines.
- SSHEXSaturdays, Sundays and Holidays ExceptedSSHEX means Saturdays, Sundays and public holidays are all excluded from laytime, so only weekdays count unless time used is counted.
- Statement of factsSOFA statement of facts (SOF) is the agent's record of every event during a port call, from arrival and NOR to hoses off, used to calculate laytime.
- Strait of HormuzThe Strait of Hormuz is the narrow passage between the Arabian Gulf and the Gulf of Oman through which most Middle East crude exports pass.
- SubjectsSubjects are conditions attached to an otherwise agreed fixture, such as charterer's approval or vetting, that must be lifted before it is binding.
- Suez CanalThe Suez Canal links the Mediterranean and the Red Sea, saving thousands of miles on Europe–Asia voyages; its draft limit is about 20 metres.
- SuezmaxA Suezmax is a tanker of about 120,000 to 200,000 deadweight tonnes, the largest size that can transit the Suez Canal fully laden, carrying around 1 million barrels.
T
- Tank cleaningTank cleaning is washing a tanker's cargo tanks between cargoes so the next cargo is not contaminated, especially when switching grades.
- TC1TC1 is the Baltic Exchange benchmark LR2 route for a 75,000-tonne naphtha cargo from Ras Tanura to Yokohama, Japan.
- TC14TC14 is the Baltic Exchange benchmark MR route for a 38,000-tonne clean products cargo from the US Gulf to the UK-Continent.
- TC2TC2 is the Baltic Exchange benchmark MR route for a 37,000-tonne clean products cargo from Rotterdam to New York.
- TCETime Charter EquivalentTCE (time charter equivalent) converts a voyage's freight into daily earnings: freight minus voyage costs, divided by the days the voyage takes.
- TD20TD20 is the Baltic Exchange benchmark Suezmax route for a 130,000-tonne crude cargo from offshore Bonny, Nigeria, to Rotterdam.
- TD25TD25 is the Baltic Exchange benchmark Aframax route for a 70,000-tonne crude cargo from the US Gulf (Houston) to Rotterdam.
- TD3CTD3C is the Baltic Exchange benchmark VLCC route for a 270,000-tonne crude cargo from Ras Tanura, Saudi Arabia, to Ningbo, China.
- Time charterTCA time charter hires the ship for a period at a daily rate; the charterer directs its employment and pays for voyage costs like bunkers and port fees.
- TMSATanker Management and Self AssessmentTMSA is OCIMF's Tanker Management and Self Assessment programme, in which tanker operators rate their own management systems against best practice.
- Tonne-milesTonne-miles measure tanker demand as cargo volume multiplied by distance carried, so longer voyages absorb more ships even if volumes don't change.
- Trip time charterA trip time charter hires a ship on time-charter terms for a single voyage, paid at a daily hire rate instead of freight per tonne.
U
- UKCUnited Kingdom / ContinentUKC (UK-Continent) is the market term for the discharge and load region from the UK across North-west Europe, roughly Le Havre to Hamburg.
- ULCCUltra Large Crude CarrierA ULCC is an ultra large crude carrier above about 320,000 deadweight tonnes, the largest tankers ever built.
- UllageUllage is the empty space between the surface of the liquid cargo and the top of the tank, measured to work out how much cargo is on board.
- Unless usedUU“Unless used” (UU) means excepted periods count as laytime if cargo is actually worked; “even if used” (EIU) means they never count.
V
- Vessel experience factorVEFThe vessel experience factor (VEF) is the average ratio between a ship's measured cargo figures and shore figures, used to correct ship quantities.
- VettingVetting is an oil company's or charterer's risk assessment of a tanker, using inspection reports and history, before agreeing to charter it or accept it at a terminal.
- VLCCVery Large Crude CarrierA VLCC is a very large crude carrier of roughly 200,000 to 320,000 deadweight tonnes, carrying about 2 million barrels of crude oil.
- Voyage charterA voyage charter is a contract to carry a cargo between named ports for a freight payment, with the owner running the ship and paying its costs.
W
- WAFWest AfricaWAF is the market abbreviation for West Africa, mainly the crude export terminals of Nigeria, Angola and the Republic of Congo.
- War risks clauseA war risks clause sets out what the owner may do, and who pays extra costs, if the voyage is exposed to war, piracy, terrorism or similar dangers.
- WCCONWhether Customs Cleared Or NotWCCON allows notice of readiness to be tendered before customs clearance, so the clock is not held up waiting for customs formalities.
- Weather working dayWWDA weather working day is a working day on which the weather allows cargo work; days or hours lost to bad weather do not count as laytime.
- WIBONWhether In Berth Or NotWIBON lets the master tender notice of readiness on arrival even if no berth is free, so waiting time for a berth can count as laytime.
- WIFPONWhether In Free Pratique Or NotWIFPON allows notice of readiness to be tendered before the ship has free pratique (health clearance), so laytime isn't delayed by that formality.
- WIPONWhether In Port Or NotWIPON lets notice of readiness be tendered even if the ship is waiting outside port limits, so waiting before entering port can count as laytime.
- WorldscaleWSWorldscale is the index used to price tanker freight: a route's flat rate is WS 100, and fixtures are agreed as a percentage of it, such as WS 60.
Browse by topic
Chartering & negotiation
How a fixture is offered, negotiated and confirmed, and the types of charter it can be.
Laytime & demurrage
The time allowed to load and discharge, when it counts, and what happens when it runs out.
- All fast
- Arrived ship
- Berth charter
- Demurrage
- Demurrage time bar
- Despatch
- Free pratique
- Half demurrage
- Laycan
- Laytime
- Laytime statement
- Narrowing the laycan
- Notice of Readiness
- Notice time
- Once on demurrage, always on demurrage
- Port charter
- Reversible laytime
- Running hours
- SHEX
- Shifting
- SHINC
- SSHEX
- Unless used
- WCCON
- Weather working day
- WIBON
- WIFPON
- WIPON
Freight & payment
How freight is quoted, earned and paid, and the commissions and costs around it.
Cargo & operations
What happens to the cargo and the ship between the load port and the discharge port.
Ships & sizes
Tanker size classes, dimensions and the measurements a desk quotes.
Documents
The paperwork that moves with a tanker cargo.
Regulation & environment
Emissions, fuel and environmental rules that change a voyage's cost.
Risk, vetting & insurance
Inspections, insurance and the clauses that allocate risk.
Market & routes
Benchmarks, chokepoints and the vocabulary of tanker market reports.