Bare-Boat charter – The ship owner gives the ship on bare boat charter if the ship owner does not have sufficient funds to run the ship. Generally the ship owner only takes care for the capital cost when working out economics. The other expenses are met by the charterer who takes care of operational cost and variable cost. This Charter is generally for a long duration. The ship owner still maintains the ownership of the vessel.
“BAREBOAT CHARTER STOPS & DEMISE CHARTER BEGINS”
Demise Charter – When the capital cost requirement of the ship owner is fulfilled on the completion of the bare boat charter period the ownership of the vessel automatically gets transferred to the charterer. The charterer becomes the disponent owner.