Tramp traffic means transporting goods and products between random ports without a regular schedule. Freight usually determines freely by supply and demand. Otherwise, chartered in accordance to conditions defined in the charter agreement.
In Voyage Charter, ship or the shipping company takes cargo to charter from port of loading to port of unloading and freight is usually determined by tonnage in dollars. However, the total amount of freight depends on the agreed shipping conditions, etc., in the charter agreement, which defines, for example, who pays for loading and unloading of goods, tying cargo as well as for loading and unloading time.
In Time Charter, shipping company rents ship to shipper against certain compensation. The length of charter can vary. Freight is informed most commonly in a certain amount (usually USD) per day. Shipping company is responsible for crew wages and other occupation costs, capital costs of the ship, technical maintenance of the ship, conventional insurances as well as for lubricants or ship’s daily costs. The time charterer, in turn, pays costs associated with operating a ship such as fuel, port and cargo handling costs, cargo- related duties and charges.
In the global tramp shipping market, charter agreements are usually signed between cargo brokers/chartering agents who represent shipping companies and shippers. Agreements are formed mainly based on existing for decades charter party forms basis.