Editorial image placeholder — Off-Hire Deductions Explained

What off-hire actually means

Under a time charter, hire accrues continuously — the charterer pays for the ship's availability, not for cargo carried. Off-hire is the contractual exception: a defined period during which hire stops accruing because the ship was not fully available to the charterer for reasons the clause specifies.

It is not automatic and it is not general-purpose. Hire only stops for events the specific off-hire clause names, worded the specific way that clause names them — this is where most disputes actually happen.

What typically triggers off-hire

Standard forms such as NYPE and Baltime list specific triggering events, though exact wording varies by form and by rider clauses negotiated into the fixture.

  • Deficiency of crew, stores, repairs, or breakdown of machinery or equipment
  • Drydocking or other owner-caused vessel unavailability
  • Detention by port state control, customs or other authority for a vessel-related deficiency
  • Grounding, unless caused by the charterer's orders
  • Time lost in excess of any threshold specified for a given event (some clauses set a minimum duration before off-hire applies at all)
Diagram placeholder — off-hire clock: trigger event to restored position

When the off-hire clock starts and stops

The starting point is usually the moment the vessel's full efficiency is lost — not the moment the problem is noticed or reported. Off-hire ends when the vessel is again in the same position, and as efficient, as it was when it went off-hire — not simply when the immediate problem is fixed.

That 'same position' requirement matters commercially: if a mechanical breakdown occurs mid-voyage and the ship has to return to a previous position to resume the voyage properly, time and any deviation involved in getting back into position can also count as off-hire, not just the repair time itself.

What gets deducted, and what doesn't

Hire is deducted for the off-hire period itself, calculated to the exact time under most modern forms (rather than rounded to full days). Bunkers consumed during the off-hire period are typically for owners' account, and any deviation associated with the off-hire event — extra steaming, extra bunkers — is usually charterers' to reclaim from owners rather than the reverse.

What does not automatically follow from an off-hire event is consequential loss: a charterer who missed a laycan at the next port because of an owner-caused breakdown does not automatically recover that downstream cost through the off-hire clause alone — that is a separate claim, if it exists at all, and depends on the wider charter party terms.

Why exact clause wording is the whole game

Two fixtures with what looks like 'the same' off-hire clause can produce different outcomes for an identical event, because of small wording differences — a threshold duration, whether weather is excluded, whether the clause is exhaustive or illustrative. Any real off-hire calculation has to work from the clause as actually fixed, not from a generic template.

Zeaclub publishes a free off-hire calculator for working a deduction through against the clause.

This article explains how off-hire clauses generally operate. It is not a substitute for reading the exact clause in the fixture in question, and is not legal advice.

Frequently asked questions

What is off-hire in a time charter?

A defined period during which hire stops accruing because the ship was not fully available to the charterer, triggered only by events the charter party's off-hire clause specifically names.

When does the off-hire clock start?

Generally from the moment the vessel's full efficiency is actually lost, not from when the problem is reported — though the exact trigger depends on the clause wording in the specific fixture.

When does off-hire end?

When the vessel is restored to the same position and level of efficiency it had when it went off-hire — which can include time and deviation needed to get back into position, not just the repair itself.

Who pays for bunkers consumed during off-hire?

Typically for owners' account during the off-hire period itself, though this depends on the specific clause and any rider terms negotiated into the fixture.

Does an off-hire event automatically cover downstream losses like a missed laycan?

No. The off-hire clause covers the hire deduction for the period itself. Consequential losses such as a missed laycan elsewhere are a separate question under the wider charter party, not an automatic extension of the off-hire deduction.

Primary sources