Voyage estimation: how to calculate what a voyage earns

What a voyage estimate is

A voyage estimate forecasts the result of a single voyage before it is fixed. It sets the freight against the costs of that particular voyage and works out how long it will take, from the moment the ship is free until the cargo is discharged. The answer is a sum for the whole voyage and a TCE (time charter equivalent), the voyage's earnings per day.

• Shipowners want to know which cargo pays best per day, and whether a voyage beats a time charter at a fixed daily rate.
• Charterers want to know what the freight ought to cost, or whether it pays to hire a ship and carry the cargo themselves. A charterer that hires in ships and carries other people's cargoes is called an operator.
• Shipbrokers use the estimate to judge offers and to show both sides what a rate means per day.

The starting point is a voyage charter, under which the owner is paid to carry the cargo and pays for fuel, port and canal costs. In dry bulk, BIMCO describes its GENCON form as the most widely used. The contract types are explained in the guide to the freight market.

The income side: freight, Worldscale and demurrage

• Per tonne is common in dry bulk: cargo quantity × rate. How much the ship can lift is limited by its deadweight, its holds and the draught at the ports. If the charterer ships less than agreed, the owner can claim deadfreight on the shortfall.
• Worldscale is used for tankers. Each year the Worldscale Association in London and New York publishes a flat rate in USD per tonne for each route, based on what a notional standard vessel of 75,000 deadweight tonnes would spend on fuel, port charges and time (Store norske leksikon, updated 5 March 2026). Freight is agreed as a percentage of the flat rate: WS 100 is the flat rate, WS 120 is 1.2 times it.
• Lump sum is a fixed amount for the voyage, however much is loaded.

Laytime is the period agreed between the parties during which the owner keeps the ship available for loading and discharging without payment beyond the freight. If the work takes longer, the charterer pays demurrage, an agreed amount for the delay. If it finishes early, the contract may entitle the charterer to despatch, an agreed amount from the owner (BIMCO, Laytime Definitions for Charter Parties 2013). Demurrage should not be treated as certain income: it pays for time the ship could have used elsewhere, and it has to be claimed afterwards.

Voyage costs

Voyage costs arise because the ship performs this particular voyage. Under a voyage charter the owner pays them.

• Bunkers (fuel) are usually the largest item, costed separately at sea and in port. Since 1 January 2020 the sulphur limit has been 0.50 % outside emission control areas (ECAs) and 0.10 % inside them, and the 0.10 % limit has applied across the Mediterranean since 1 May 2025 (IMO, accessed 24.10.2026). Open-sea legs are therefore often costed on VLSFO (very low sulphur fuel oil), while ECA legs need dearer marine gas oil (MGO) unless the ship has a scrubber.
• Port and canal costs: port dues, pilotage, towage, mooring and agency. Suez and Panama tolls depend on, among other things, the ship's size and whether it is laden.
• Commissions: address commission, an agreed rebate to the charterer, and brokerage, both a percentage of gross freight.
• Cargo and holds. On FIO (free in and out) terms the charterer pays for loading and discharging. Cleaning holds or tanks and anything else needed to get the ship ready for the cargo belongs in the estimate.
• War risk premium for voyages through high-risk areas. Which insurances owners and charterers carry, including charterers' own liability cover, is covered in the guide to maritime law and marine insurance.
• Emission allowances. Ships of 5,000 gross tonnage and above must surrender EU ETS allowances for 100 % of emissions between EEA ports and in port there, and for 50 % on voyages into or out of the EEA. The phase-in is complete for emissions from 2026 (European Commission, updated 6 May 2026; Norwegian Environment Agency). The charter party settles who pays, and BIMCO has clauses for it.

Operating costs (crew, maintenance, hull and P&I insurance) and capital costs (interest, repayments or hire) are not voyage costs. The owner bears them regardless.

Time: sea days, port days and laytime

TCE is a figure per day, so time counts as much as cost. The voyage runs from the moment the ship is open to the end of discharge.

• Sea days = distance / speed / 24, with distance in nautical miles (1,852 metres) and speed in knots (nautical miles per hour). The voyage is split into a ballast leg to the load port and a laden leg to the discharge port, often at different speeds and consumption.
• Weather margin. Wind, waves and current mean a ship rarely holds its speed all the way, so a few per cent is often added to the sea days.
• Port days cover waiting, loading and discharging; queues at canals and congested ports go in as extra days. Laytime is a starting point, but actual port time may differ. Laytime normally starts after the notice of readiness, the ship's notice that it has arrived and is ready to load or discharge. Terms such as SHINC and SHEX state whether Sundays and holidays count.

TCE step by step

• Gross freight = cargo quantity × rate (or WS / 100 × flat rate × cargo quantity).
• Net freight = gross freight − commissions.
• Voyage costs = bunkers + port and canal costs + other voyage costs.
• Voyage result = net freight − voyage costs.
• Voyage days = sea days with weather margin + port days + waiting.
• TCE = voyage result / voyage days.

TCE comes before operating and capital costs, which the owner carries anyway, so it can be compared directly with a time charter rate. For an operator that has chartered the ship in, hire is a cost: the result is voyage result − daily hire × voyage days. Work backwards and you get the breakeven rate, the freight that delivers exactly a given TCE.

A worked example

The voyage earns about USD 15,800 a day, so a time charter at a higher rate for the same period would pay more. If an operator has chartered the ship in at USD 14,000 a day (also hypothetical), its result is 525,845 − 14,000 × 33.20 = USD 61,045, and its breakeven is about USD 20.85 per tonne.

Speed, fuel prices and eco-speed

Consumption rises much faster than speed. The IMO's rule of thumb is that engine power follows the cube of speed: a 10 % cut in speed reduces the power needed by about 27 %, and fuel for the whole voyage by about 19 %, because the voyage takes longer (IMO GreenVoyage2050, accessed 24.10.2026). Actual consumption comes from the ship's own data and varies with draught, weather and hull condition.

Sailing slower to save fuel is called slow steaming or eco-speed. It pays as long as the fuel saved per extra day is worth more than the ship earns per day. The table changes only the laden speed in the example.

Going from 12.5 to 12 knots saves 48.4 tonnes of VLSFO but adds 0.92 days. At USD 600 per tonne that is about USD 31,600 saved per extra day, well above the TCE, so slowing down pays. At USD 400 it is about USD 21,100, close to the TCE, and 12 knots gives the best result in the table. Dearer fuel pulls the best speed down; higher freight rates push it up.

Every extra USD 100 per tonne on VLSFO adds USD 69,930 to the voyage, about USD 2,100 a day off the TCE, whereas an extra dollar per tonne of freight adds about USD 1,600 a day. Emission rules point the same way: since 1 January 2023 ships of 5,000 gross tonnage and above have received an A-to-E rating for carbon intensity (CII), and speed and routeing optimisation are among the ways to improve it (IMO, accessed 24.10.2026).

Common mistakes

• Leaving out the ballast leg. The voyage starts where the ship opens. Without the ballast days, a distant cargo looks better than it is.
• Optimistic timing. No weather margin and no waiting. Two days' wait at the discharge port cuts the TCE in the example from USD 15,839 to USD 14,802 a day.
• Mixing in operating costs. The TCE can then no longer be compared with daily rates.
• Forgetting commissions, or taking them off net rather than gross freight.
• The wrong fuel price. Use the price where the ship will actually bunker, and low-sulphur fuel inside ECAs.
• Treating deadweight as cargo, although deadweight also includes fuel, fresh water and stores.
• Mixed-up units: nautical miles and kilometres, hours and days, metric tonnes and long tons. WS points are a percentage of the flat rate, not dollars.

Run your own numbers in the voyage calculator

OESA's voyage calculator runs the same sums for ten common ship types. Pick the ports and the ship, and it finds the shortest sea route and works out sea days, fuel, canal tolls, port calls, war risk premium, EU ETS and TCE, with freight entered in WS points or USD per tonne.

It doubles as a simple voyage simulator: change the speed, switch on the weather margin or “Return in ballast”, or avoid Suez, Panama or the Red Sea, and see what happens to the time, the cost and the daily earnings. It also shows the cheapest speed at current prices. The terms are explained in the glossary.

Sources

• Laytime Definitions for Charter Parties 2013 – BIMCO – definitions of laytime terms, developed for incorporation into charter parties
• BIMCO, Laytime Definitions for Charter Parties 2013 – reproduced by Trans-Lex – the definitions of laytime (no. 5), notice of readiness (no. 25), demurrage (no. 30) and despatch (no. 31)
• GENCON 2022 – BIMCO – the standard voyage charter party, the most widely used in dry bulk according to BIMCO
• ETS – Emission Scheme Freight Clause for Voyage Charter Parties – BIMCO – allowance costs built into the freight; BIMCO also has a surcharge clause
• Worldscale – Store norske leksikon (Norwegian encyclopaedia) – flat rates in USD per tonne, the 75,000 dwt standard vessel and annual schedules; updated 5 March 2026
• Worldscale Association
• IMO 2020 – cutting sulphur oxide emissions – IMO – the 0.50 % and 0.10 % sulphur limits and the Mediterranean from 1 May 2025; accessed 24.10.2026
• Speed management – IMO GreenVoyage2050 – the cube rule and the 10 % speed reduction example; accessed 24.10.2026
• EEXI and CII – ship carbon intensity and rating system – IMO – CII from 1 January 2023, ships of 5,000 GT and above, ratings A–E; accessed 24.10.2026
• Reducing emissions from the shipping sector – European Commission – the 100 % and 50 % shares, the phase-in and the 5,000 GT threshold; updated 6 May 2026
• Skipsfart i EUs kvotesystem – Norwegian Environment Agency (in Norwegian) – the obligation across the EEA and the phase-in; accessed 24.10.2026

The guides are written by OESA students to explain concepts and how things fit together. They are not investment advice. Figures that are not definitions carry a source and a date; if you find an error, let us know at philipstave@oesa-global.com.