Time Charter Equivalent is a standard performance index of the marine industry, which is mainly used to compare period-to-period changes in the performance of a shipping company despite changes in the mix of charter types. Yacht buyers and owners keep thinking about the same question: “Should we charter the yacht or not?” It is not uncommon for us to hear from owners who are new to chartering ambitious targets for 20 weeks of charters per year. They may not have qualified charter captains and maritime legal advice, but after receiving information from friends who have “successfully” chartered their own yacht, they are forming forward, neglecting the many laws that govern chartering in American waters. So what is at stake in legal and correct chartering? We do not have room for a full presentation, but we do offer some guidance. The Passenger Service Act limits the use of foreign-built vessels to carry passengers for rent or trade between U.S. ports. Under foreign flag, yachts in possession and built can only not be commercially operated in the United States. Although rental passenger transport is considered a commercial use, demolition chartering is not considered a commercial operation until charterers use the vessels for commercial purposes (in turn, the owner or owner`s representative cannot be involved in the crew`s engagement). Depending on the type of vessel and the type of charter, a standard contract form, designated as a party to the charter, is used to record the exact rate, duration and conditions agreed between the owner and the charterer. To the knowledge of the partnership parties, the charter parties hold the government licences that must be obtained in accordance with the provisions of the charter agreements or reasonably expect to have government licences in ordinary cases that are the responsibility of the charter parties.
On cash chartering, which is less used in the usual business practice, the owner delivers it to the charterer for the agreed period, without crew, business, insurance or other provisions. Contracts can also be entered into as a lump sum when an owner agrees to ship a certain amount of a reported shipment from one port to another for a reported amount of money. The charterer`s liability insurance coverage coverage may vary depending on the type of charter and the additional inclusions or exclusions agreed before the purchase of the insurance.