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Glossary

Word Meaning
ABS: American Bureau of Shipping, a ship classification society.
Annual survey: The inspection of a vessel pursuant to international conventions, by a classification society surveyor, on behalf of the flag state, that takes place every year.
Bareboat charter: A charter in which the customer (the charterer) pays a fixed daily rate for a fixed period of time for the full use of the vessel and becomes responsible for all crewing, management and navigation of the vessel and the related expenses.
Brokerage commission: Commission payable by the ship’s owner to the broker, expressed as a percentage of the freight or hire and is part of the charterparty.
Bulker: A bulk carrier is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore or cement in its cargo holds.
Bunker: Fuel, consisting of fuel oil and diesel, burned in a vessel's engines.
Capesize: Ships that are the largest-sized bulk carriers and tankers; to travel between oceans, such vessels used to have to pass either the Cape of Good Hope or Cape Horn, as they could not transit the Panama or Suez canals.
Charter: The hiring of a vessel, or use of its carrying capacity, for a specified period of time.
Charterer: A person, firm or company hiring a vessel for the carriage of goods or other purposes.
Charterhire: The gross revenue earned by a vessel pursuant to a bareboat, time or voyage charter.
Charterparty: A contract covering the transportation of cargo by sea, including the terms of the carriage, remuneration and other terms.
Classification society: An independent society which certifies that a vessel has been built and maintained in accordance with the rules of such society and complies with the applicable rules and regulations of the flag state of such vessel and the international conventions of which that country is a member.
Container: A reusable steel rectangular box for carrying cargo.
Container ship: A cargo ship designed to hold containerized cargoes.
Double-hull: Hull construction technique by which a ship has an inner and outer hull, separated by void space, usually several feet in width.
Drydocking: The removal of a vessel from the water for inspection, maintenance and/or repair of submerged parts.
DNV: Det Norske Veritas, a ship classification society.
Dwt: Deadweight, a measure of oil tanker carrying capacity, usually in tons, based upon weight of cargo and other items necessary to submerge the vessel to its maximum permitted draft.
Flag state: The country where a vessel is registered.
Hire rate: The agreed sum or rate to be paid by the charterer for the use of the vessel.
Hull: Shell or body of a ship.
H&M: Hull and machinery insurance.
Ice Class 1A: A vessel meeting the requirements for transit through ice with a thickness of 0.8 meters or less.
IMO: International Maritime Organization, a United Nations agency that issues international trade standards for shipping.
Intermediate survey: The inspection of a vessel by a classification society surveyor that takes place every two and a half years after the special survey.
ISM Code: International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, which, among other things, requires vessel owners to obtain a safety management certification for each vessel they manage.
ISPS: International Security Code for Ports and Ships, which enacts measures to detect and prevent security threats to ships and ports.
IWL: Institute Warranty Limits define normal trading areas for merchant vessels.
LRS: Lloyd's Register of Shipping, a ship classification society.
MARPOL The International Convention for the Prevention of Pollution from Ships.
Medium-range (MR): A tanker with a carrying capacity of 30,000-55,000 dwt which is used primarily for carrying a wide variety of refined oil products.
Newbuilding: A new vessel under construction or on order.
Off-hire: The time during which a vessel is not available for service.
Operating costs: The costs of the vessels including crewing costs, insurance, repairs and maintenance, stores, spares, lubricants and miscellaneous expenses (but excluding capital costs and voyage costs).
Operating days: The days a vessel is in operation for a period, measured by subtracting idle days from available days.
OPEX: Operating expenses or operating costs. The costs of the vessels including crewing costs, insurance, repairs and maintenance, stores, spares, lubricants and miscellaneous expenses (but excluding capital costs and voyage costs).
P&I: Protection and indemnity. This denotes the insurance coverage taken by a ship owner or charterer against third party liabilities such as oil pollution, cargo damage, crew injury or loss of life, etc.
P&I Association: A mutual insurance association providing P&I insurance coverage.
Post-Panamax: Ships which are not capable of passing through the lock chambers of the present Panama Canal. Such vessels will be able to transit the Panama canal after its expansion is completed.
Product tanker: A tanker designed to carry a wide variety of liquid products, including clean products (such as refined petroleum products and edible oils) and crude oil. Product/chemical tankers also carry acids and other chemicals. The separated cargo tanks in both types of tankers are coated to prevent product contamination and hull corrosion.
Refined petroleum products: The resulting product recovered in an oil refinery at the various stages of processing crude oil, such as fuel oil, diesel and gasoil, kerosene and gasoline.
Sister ships: One or more vessels with the same specifications, typically built at the same shipyard.
SOLAS: International Convention for Safety of Life at Sea, which provides, among other things, rules for the construction and equipment of commercial vessels.
Special survey (S/S): The extensive inspection of a vessel by a classification society surveyor that takes place every five years.
Spot market: The market for chartering a vessel for single voyages.
Tanker: A vessel that transports liquid (wet) cargoes, such as refined petroleum products, crude oil, edible oils and chemicals.
TCE (Time Charter Equivalent): A shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per day amounts while charter hire rates for vessels on time charters generally are expressed in such amounts. TCE is expressed as a per ship per day rate and is calculated as voyage and time charter revenues less voyage expenses during a period divided by the number of operating days during the period.
TEU: Twenty foot Equivalent Units. The unit of measurement of a standard twenty foot long container.
Time charter: A charter in which the charterer pays for the use of a ship's cargo capacity for a specified period of time. The owner provides the ship with crew, stores and provisions, ready in all aspects to load cargo and proceed on a voyage as directed by the charterer. The charterer usually pays for bunkering and all voyage-related expenses, including canal tolls and port charges.
Voyage Expenses: Expenses directly attributable to the vessel voyage, which primarily consist of commissions, port and canal dues and bunker expenses.
Worldscale: Worldwide Tanker Nominal Freight Scale. Worldscale Association, a shipping industry group, publishes a lengthy schedule of rates for popular tanker voyages. The printed figures, called Worldscale 100's, reflect the application of tanker operating cost assumptions to various ports and the distance/steaming time for each route. These "flat rates" appear in US dollars per ton of cargo. Ship owners and spot charterers usually negotiate the hire price of a tanker as a percentage of Worldscale 100 for the voyage involved.