Chartering in liquid terminals: Contracts and logistics efficiency

Introduction

Within the framework of operations carried out in liquid bulk terminals, chartering or maritime chartering represents a strategy to ensure the efficient transportation of crude oil, refined products and liquefied natural gas (LNG). These cargoes, handled without individual packaging by tankers or barges, require highly synchronized logistical planning between port agents and shipping companies.

Beyond its transactional nature, chartering has evolved as a logistics tool to optimize berthing windows, coordinate operational resources and reduce delay penalties in an increasingly regulated environment in terms of sustainability and traceability. These strategies are aligned with the operational efficiency objectives promoted by associations such as the International Liquid Terminals Association (ILTA).

What is chartering in liquid terminals?

It is the specialized contracting of tankers under flexible schemes to transport liquid bulk, optimizing logistic efficiency, time and response capacity. This contractual modality allows aligning the maritime operation with the cargo requirements, port infrastructure and market conditions.

In high-turnover terminals, chartering becomes a strategic gear to synchronize laytime, manage tonnage availability and ensure operational continuity. Through time, voyage or quantity chartering, this practice reinforces traceability, reduces operational risks and contributes to the resilience of specialized global port supply chains.

Charterer, shipowner and broker: key roles in maritime chartering

Charterer

It is the trading company, refinery or trader that contracts the transportation of the cargo. Among its responsibilities are coordinating product availability, communicating operational conditions to the shipowner and complying with the “Charterer’s Obligations”, which include loading times, line cleaning and documentation delivery.

Shipowner

Vessel-owning shipping companies are responsible for the maintenance and operational availability of the contracted tonnage. They provide the vessel, its crew and ensure its technical condition in accordance with the terms of the contract. Their role also includes compliance with flag regulations, insurance and vessel certifications.

Maritime Broker

He is the intermediary between charterers and shipowners. It negotiates rates and clauses, manages access to available tonnage, advises on cargo compatibility and supervises laytime. His role is key to avoid demurrage charges, ensure regulatory compliance and mitigate documentary risks in liquid bulk terminal operations.

The correct articulation between those involved is essential for the efficiency of liquid bulk port logistics.

Laytime and demurrage: Operational efficiency under contract

Laytime is the period granted to the charterer to complete loading or unloading operations in port without incurring penalties. If this time is exceeded, demurrage is generated, a compensation to the shipowner that increases logistics costs and affects port scheduling¹.

What is demurrage in maritime transport? It is precisely that excess time that goes beyond the laytime stipulated in the charter contract, generating a cost overrun for the charterer and affecting the overall efficiency of the terminal. The correct management of laytime is essential to avoid congestion, optimize slot rotation and comply with the operational standards of liquid terminals.

Chartering modalities and their logistic impact in liquid terminals

The modalities of maritime chartering vary according to the contract duration, the charterer’s operational control and risk allocation. In the context of specialized liquid bulk marine terminals, each type of charter directly influences logistics planning, the use of critical infrastructure and the operating costs associated with loading and unloading operations.

Voyage Charter

Contract for a single voyage between loading and discharge port, under shipowner’s control. Impact: requires precise laycan and ETA management, as well as coordination of loading lines and articulated arms to avoid overtime penalties.

Time Charter

The vessel is chartered for a specific period; the charterer manages the operation and itinerary. Impact: requires greater coordination with terminals due to possible logistical changes. Efficiency in turnaround minimizes daily charter cost.

Bareboat Charter

The charterer assumes full control of the vessel, including its legal and technical operation. Impact: requires long-term planning adjusted to the terminal’s infrastructure capabilities (quay, loading arms, draft).

Contract of Affreightment (COA)

Agreement to mobilize a defined volume over a period of time, without setting specific vessels. Impact: Improves logistical flexibility and allows scheduling cargo campaigns in advance, optimizing resources and reducing downtime.

Chartering contracts: Forms and technical clauses

Contract management is necessary for operational continuity. Standard forms are available:

Most common contract forms

Among the most commonly used contract forms in maritime chartering are the GENCON, a standard contract for general cargo voyages; the NYPE and BALTIME, applied in time chartering; and the ASBATANKVOY, SHELLTIME and INTERTANKO, designed specifically for tankers, which include technical clauses for the handling of hazardous or sensitive liquid products.

Key contractual clauses

Among the most critical elements of the charter party are the operating clauses, such as the laycan and NOR, which establish the arrival window, official notification of availability; demurrage² and despatch, which regulate penalties and time bonuses; force majeure, for unforeseen events; and loading conditions, which require cleanliness, product compatibility, thermal control and volumetric tolerances.

The adoption of these contractual standards and their digital integration allows terminals to monitor KPIs, plan operations and reduce operational risks.

Chief MAKOi’s video “Vessel Chartering: How Ships Win, Even If They Don’t Move” provides an explanation of the fundamental concepts of maritime chartering. It addresses the types of contracts, the roles of the parties involved and the importance of logistics planning in shipping.

Technology applied to chartering in liquid terminals

Technology integrates contracts and port systems to maximize efficiency, reduce costs and strengthen environmental compliance:

1. Berth scheduling systems: A dynamic planning synchronized with contract data, optimizing the berthing sequence and reducing demurrage costs.
2. Document digitization with Blockchain: Electronic exchange of documents (NOR, B/L, freight orders) with enhanced traceability and integrity through blockchain.
3. Digital chartering platforms: Platforms such as Shipnext, OpenSea and Maritech optimize tonnage search, rate comparison and routing, speeding up processes and reducing dependence on intermediaries.
4. Real-time monitoring: Continuous measurement of laytime, loading/unloading rates and emissions through sensors and AIS, including cold ironing to reduce dock emissions.
5. Artificial intelligence: AI algorithms perform predictive congestion analysis and logistics slot optimization. Companies such as Stolt Tankers, Hafnia and MOL Chemical Tankers use machine learning to optimize resources. Trends and transformation in the chartering market.

Trends and KPIs in port logistics

• Green chartering: Prioritizes energy efficiency and sustainability through ships with lower emissions, optimized routes, use of alternative fuels and technologies such as cold ironing, in line with ESG policies and port decarbonization objectives.
• Dynamic rates: Cost adjustment based on indicators such as port congestion, tonnage availability, weather conditions and commercial risks, which improves competitiveness in the spot market.
• Smart Chartering and digital vetting: Integration of AIS data, weather forecasts, laycan and logistics KPIs to support real-time strategic decisions. Through digital vetting, technical, regulatory and ESG assessment is automated before assigning a vessel to an operation.

Terminals in hubs such as Houston, Rotterdam or Singapore apply these approaches to improve their operational performance, traceability and risk management.

Relevant indicators in liquid terminals

Chartering, when strategically integrated with port operations, has a direct impact on:

• Vessel Turnaround Time (VTT): The total time between berthing and departure of the vessel, essential to maximize slot turnover.
• Demurrage: Penalties associated with demurrage that affect operational efficiency and logistics costs.
• Laycan Compliance: The level of alignment between vessel arrival and the contractually agreed time window.
• Port Emissions: The assessment of emissions generated during operations, key to comply with ESG standards.
• TOS, SCADA, ERP integration: Interoperability between systems to synchronize operations, monitor KPIs and improve traceability.

Operational collaboration between terminals, charterers and shipowners is essential to ensure efficiency, traceability and ESG compliance.

Risk management in maritime chartering operations

In the context of liquid terminals, chartering risks affect the direct maritime stakeholders (charterers and shipowners), as well as the operational performance of port facilities. The most relevant risks include:

• Overtime penalties: The accumulation of non-operating times can saturate liquid terminal availability, interfere with planned berthing windows and generate congestion in terminals with high turnover.
• Vessel cancellation or substitution: Unexpected changes in the assigned vessel can impact the terminal’s internal logistics, from the scheduling of valves, lines and loading arms to the allocation of storage tanks and operating personnel.
• Spot market volatility: Uncertainty in tanker availability and rates can make it difficult to plan ahead for slots and compromise storage capacity if flows are not under contract (out of COA).
• Cargo contamination: Inadequate tank cleaning on chartered vessels can generate cross-contamination, affecting product quality and leading to rejection or costly reprocessing.
• Documentary errors: Inaccuracies or discrepancies in contract documentation, freight orders, or arrival notices may cause delays in product release or contractual disputes.
• Mismatch between arrival plan and operational capacity: When there is a mismatch between vessel characteristics (draft, pumping capacity, type of connection) and available infrastructure, indicators such as berth occupancy, pump rate and cargo handling efficiency are compromised.

Risk mitigation strategies for companies and marine terminals

To reduce chartering-related disruptions and preserve logistics efficiency in liquid bulk terminals, a preventive and collaborative technical approach is recommended:

• Pre-arrival technical and documentary vetting: Evaluate in advance the compatibility of the vessel with the terminal infrastructure, its cleaning history, and specific contractual conditions.
• Integration with the port management system (TMS): Synchronize ETA, laycan and vessel specifications (draft, length, connection type) with dock capacities to avoid operational delays.
• Legal review of critical clauses: Include in contracts clear clauses on force majeure, change of vessel, cleanliness standards and consequences for non-compliance.
• Contingency and operational response protocols: Establish defined procedures to react to vessel substitutions, technical incompatibilities, or unexpected delays, ensuring continuity of service without compromising safety or quality.

Conclusions

Marine chartering in liquid terminals has evolved from a traditional operational function to a strategic component that connects efficiency, sustainability and regulatory compliance. The integration of technologies such as AI, blockchain and innovative SCADA systems, together with smart contract management, allows minimizing risks, optimizing resources and improving key logistics indicators.

In this environment, modern chartering represents a tangible competitive advantage. Adopting these practices, supported by frameworks such as those promoted by ILTA, ensures a more resilient port logistics that is connected and ready to meet the challenges of international liquid bulk trade.

References

1. Fortior Law. (2022, May 27). Laytime and demurrage. https://fortiorlaw.com/news/laytime-and-demurrage/
2. Fernando, J. (2022, August 17). Demurrage: What it means, how it works, example (T. J. Catalano, Ed.). Investopedia. https://www.investopedia.com/terms/d/demurrage.asp