Annual Survey—The inspection of a vessel by a classification society, on behalf of the country whose flag a vessel flies, or the flag state, that takes place every year.

Ballast—A voyage during which the ship is not laden with cargo.

Bunkers—Heavy fuel oil used to power a vessel’s engines.

Capesize—A drybulk vessel with a cargo-carrying capacity exceeding 100,000 dwt. These vessels generally operate along long haul iron ore and coal trade routes. Only the largest ports around the world possess the infrastructure to accommodate vessels of this size.

CII– Carbon Intensity Indicator rating scheme addressing the operational efficiency. The CII measures how efficiently a ship transports goods or passengers and is given in grams of CO2 emitted per cargo-carrying capacity and nautical mile. The ship is then given an annual rating ranging from A to E, whereby the rating thresholds will become increasingly stringent towards 2030. While the EEXI is a one-time certification targeting design parameters, the CII addresses the actual emissions in operation.

Charter—The hire of a vessel for a specified period of time or to carry a cargo for a fixed fee from a loading port to a discharging port. The contract for a charter is called a charterparty.

Charterer—The individual or company hiring a vessel.

Charter Rate—The amount of money agreed between the charterer and the ship-owner accrued on a daily or monthly basis that is used to calculate the vessel’s charter hire.

Classification Society—An independent organization that certifies that a vessel has been built and maintained in accordance with the rules of such organization and complies with the applicable rules and regulations of the country of residence of such vessel and the international conventions of which that country is a member. A vessel that receives its certification is referred to as being “in class” as of the date of issuance.

Contract of Affreightment—A contract of affreightment, or CoA, relates to the carriage of specific quantities of cargo with multiple voyages over the same route and over a specific period of time, which usually spans a number of years. A CoA does not designate the specific vessels or voyage schedules that will transport the cargo, thereby providing both the charterer and ship owner greater operating flexibility than with voyage charters alone. The charterer has the flexibility to determine the individual voyage scheduling at a future date while the ship owner may use different ships to perform these individual voyages. As a result CoAs are mostly entered into by large fleet operators such as pools or ship owners with large fleets of the same vessel type. All of the ship’s operating, voyage and capital costs are borne by the ship owner while the freight rate normally is agreed on a per cargo ton basis.

Deadweight Ton—“dwt”—A unit of a vessel’s capacity for cargo, fuel oil, stores and crew, measured in tons. A vessel’s dwt or total deadweight is the total weight the vessel can carry when loaded to a particular load line.

Double-Hull—Hull construction design in which a vessel has an inner and outer side and bottom separated by void space, usually two meters in width.

Draft—Vertical distance between the waterline and the bottom of the vessel’s keel.

Drybulk—Non-liquid cargoes of commodities shipped in an unpackaged state.

Drybulk Vessels—Vessels that are specially designed and built to carry large volumes of cargo in bulk cargo form.

Drydocking—The removal of a vessel from the water for inspection and/or repair of those parts of a vessel which are below the water line. During drydockings, which are required to be carried out periodically, certain mandatory classification society inspections are carried out and relevant certifications issued. All vessels are surveyed on a five-year cycle during which the intermediate survey occurs between the second and the third year and the special survey occurs prior to the end of the fifth year. Most vessels are drydocked during the intermediate survey, however an in-water survey may be undertaken in lieu of drydocking up to the tenth anniversary of vessel delivery, subject to certain conditions. All vessels are drydocked as part of their special survey.

EEXI– Energy Efficiency Existing Ship Index addressing the technical efficiency of ships. The EEDI for new ships is an important technical measure which requires a minimum energy efficiency level per capacity mile (e.g. tonne mile) for different ship type and size segments. Since 1 January 2013, following an initial two year phase zero, new ship design needs to meet the reference level for their ship type, which level is tightened every 5 years. The EEDI provides a specific figure for an individual ship design, expressed in grams of carbon dioxide (CO2) per ship’s capacity-mile (the smaller the EEDI the more energy efficient ship design) and is calculated by a formula based on the technical design parameters for a given ship. The CO2 reduction level (grams of CO2 per tonne mile) for the first phase is set to 10%. Reduction rates have been established until the period 2025 and onwards when a 30% reduction is mandated for applicable ship types calculated from a reference line representing the average efficiency for ships built between 2000 and 2010.

Freight—Money paid to the ship-owner by a charterer for the use of a vessel under a voyage charter. Such payment is usually made on a lump-sum basis upon loading or discharging the cargo and is derived by multiplying the tons of cargo loaded on board by the cost per cargo ton, as agreed to transport that cargo between the specific ports.

Gross Ton—Unit of 100 cubic feet or 2.831 cubic meters used in arriving at the calculation of gross tonnage.

Handymax—Handymax class vessels have a cargo carrying capacity of between 30,000 to 50,000 dwt. These vessels operate on a large number of geographically dispersed global trade routes, carrying primarily grains and minor bulks. Vessels below 60,000 dwt are sometimes built with on-board cranes enabling them to load and discharge cargo in countries and ports with limited infrastructure.

Handysize—Handysize class vessels have a cargo carrying capacity of up to 30,000 dwt. These vessels carry exclusively minor bulk cargo. Increasingly, these vessels are operating on regional trading routes. Handysize class vessels are well suited for small ports with length and draft restrictions that may lack the infrastructure for cargo loading and unloading.

Hull—The shell or body of a vessel.

International Maritime Organization—“IMO”—A United Nations agency that issues international trade standards for shipping.

Intermediate Survey—The inspection of a vessel by a classification society surveyor which takes place between two and three years before and after each special survey for such vessel pursuant to the rules of international conventions and classification societies.

ISM Code—The International Management Code for the Safe Operation of Ships and for Pollution Prevention, as adopted by the IMO.

Kamsarmax—A Panamax class drybulk vessel with a cargo carrying capacity between 80,000 and 90,000 dwt.

Metric Ton—“Mt”—A unit of weight equal to 1,000 kilograms.

MEPC Marine Environment Protection Committee

Newbuild—A newly constructed vessel.

Off-Hire—The period in which a vessel is unable to perform the services for which it is immediately required under a period time charter. Off-hire periods can include days spent on repairs, drydocking and surveys, whether or not scheduled.

OPA—The United States Oil Pollution Act of 1990 (as amended).

Orderbook—A reference to currently placed orders for the construction of vessels (e.g., the Panamax orderbook).

Panamax—A drybulk vessel of approximately 60,000 to 100,000 dwt of maximum length, depth and draft, generally capable of passing fully loaded through the Panama Canal. The ability of most Panamax class vessels to pass through the Panama Canal makes them more versatile than larger vessels. Panamax class vessels carry coal, grains, and, to a lesser extent, minor bulks, including steel products, forest products and fertilizers. The term Panamax has become more broadly understood to include vessels with large dimensions, such as Kamsarmax class vessels and Post-Panamax class vessels, which are too large to traverse the Panama Canal.

Period Time Charter—Contract for hire of a ship for a period of three months or longer under which the ship owner is paid charter rate on a per day basis for the period of time. Under a period time charter, the vessel owner is responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the charterer, save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.

Post-Panamax—A Panamax class vessel with a cargo carrying capacity of between 80,000 and 100,000 dwt, with design specifications that prevent it from transiting the Panama Canal.

Protection and Indemnity Insurance—Insurance obtained through a mutual association formed by vessel owners to provide liability insurance protection from large financial loss to one member through contributions towards that loss by all members.

Scrapping—The disposal of old or damaged vessel tonnage by way of sale as scrap metal.

Short-Term Period Time Charter—A period time charter which lasts less than approximately 12 months.

SEEMP – The Ship Energy Efficiency Management Plan is an operational measure that establishes a mechanism to improve the energy efficiency of a ship in a cost-effective manner. The SEEMP also provides an approach for shipping companies to manage ship and fleet efficiency performance over time using, for example, the Energy Efficiency Operational Indicator (EEOI) as a monitoring tool. The guidance on the development of the SEEMP for new and existing ships incorporates best practices for fuel efficient ship operation, as well as guidelines for voluntary use of the EEOI for new and existing ships (MEPC.1/Circ.684).

Single Hull—A hull construction design in which a vessel has only one hull.

Sister Ships—Vessels of the same class and specification that were built by the same shipyard.

SOLAS—The International Convention for the Safety of Life at Sea 1974, as amended, adopted under the auspices of the IMO.

Special Survey—The inspection of a vessel by a classification society surveyor which takes place a minimum of every four years and a maximum of every five years.

Spot Charter—A spot charter is an industry term referring to both voyage and trip time charters of a duration of three months or less. These charters are referred to as spot charters or spot market charters due to their short-term duration, consisting mostly of a single voyage between one load port and one discharge port.

Spot Market—The market for immediate chartering of a vessel, usually for single voyages.

Strict Liability—Liability that is imposed without regard to fault.

Tanker—Vessel designed for the carriage of liquid cargoes in bulk with cargo space consisting of many tanks. Tankers carry a variety of products including crude oil, refined petroleum products and liquid chemicals.

TCE—Period time charter equivalent, a standard industry measure of the average daily revenue performance of a vessel. The TCE rate achieved on a given voyage is expressed in U.S. dollars/day and is generally calculated by subtracting voyage expenses, including bunkers and port charges, and commissions from revenue and dividing the net amount (period time charter equivalent revenues) by the round-trip voyage duration. TCE is a standard seaborne transportation industry performance measure used primarily to compare period-to-period changes in a seaborne transportation company’s performance despite changes in the mix of charter types (i.e., spot charters, period time charters and bareboat charters) under which the vessels may be employed during specific periods.

Ton—1,000 kilograms.

Trip time charter—A trip time charter is a short-term period time charter where the vessel performs one or more voyages between load port(s) and discharge port(s) and the charterer pays a fixed daily hire rate on a semi-monthly basis for use of the vessel. The difference between a trip time charter and a voyage charter is only in the form of payment for use of the vessel and the respective financial responsibilities of the charterer and ship owner as described under period time charter and voyage charter.

Vessel Operating Expenses—The costs for crewing, insurance, lubricants, spare parts, provisions, stores, repairs, maintenance, statutory and classification expense, drydocking, intermediate and special surveys and other miscellaneous items. Vessel operating expenses exclude fuel and port charges, which are known as “voyage expenses.” For a period time charter, the vessel owner pays vessel operating expenses.

Voyage Charter—A voyage charter involves the carriage of a specific amount and type of cargo from specific load port(s) to specific discharge port(s), subject to various cargo handling terms. Most of these charters are of a single voyage nature between two specific ports, as trading patterns do not encourage round voyage trading. The owner of the vessel receives one payment derived by multiplying the tons of cargo loaded on board by the cost per cargo ton, as agreed to transport that cargo between the specific ports. The owner is responsible for the payment of all expenses including voyage, operating and capital costs of the vessel. The charterer is typically responsible for any delay at the loading or discharging ports.

Voyage Expenses—Expenses incurred in connection with a vessel’s traveling from a loading port to a discharging port, such as the cost of bunkers, port expenses, agents’ fees, canal dues, extra war risks insurance, draft surveys, hold cleaning, postage and other miscellaneous expenses related to the cargo and voyage.

Weighted Average Age—The weighted average age of a fleet is the sum of the age of each vessel in the fleet in each year from its delivery from the builder, weighted by the vessel’s dwt in proportion to the total dwt of the fleet or each respective year.