How Ship Chartering Works: From Position to Fixture

Positions and cargoes: the starting point

Every chartering negotiation starts from two sides finding each other. Owners (or their brokers) circulate the vessel's position — where it is, when it will be free, and its specification — while charterers (or their brokers) circulate cargo requirements: quantity, load and discharge ports, laycan, and cargo type.

A significant part of a chartering broker's daily work is simply tracking and matching these positions and cargoes across a fragmented, largely relationship-driven market where no single centralised exchange lists every opportunity.

Negotiation and subjects

• An indication is an initial, non-binding statement of interest or approximate terms from either side.
• An offer moves the negotiation to specific, named terms — rate, laycan, cargo quantity, key clauses.
• 'Subjects' are conditions that must be satisfied before a fixture is firm — commonly subject to stem (cargo confirmation), subject to vessel approval, and subject to charterers'/owners' final approval of terms.
• Once subjects are lifted by both sides, the fixture is considered 'clean' or firm.

From fixture to charter party

Once terms are agreed and subjects lifted, the deal is fixed — the vessel is committed to that cargo, and the charterer to that vessel. A recap message typically summarises agreed terms immediately, with the full charter party document (based on a standard industry form, amended by negotiated additional clauses) executed formally afterward.

The charter party is the legally binding contract governing the voyage or period — laytime, demurrage, cargo handling, payment terms and dispute resolution are all defined by its terms, whether the standard form is used largely as-is or heavily amended.