Vessel Sale and Purchase vs Chartering | Expert Guide from O'Keeffe & Partners

Building and maintaining a shipping fleet involves more than just acquiring vessels. For shipowners, charterers, and investors, the decision often comes down to whether to buy ships outright through sale & purchase transactions or to secure vessels through chartering agreements. Each path carries its own opportunities and challenges, and the right choice depends on a company’s capital structure, long-term strategy, and risk appetite.

At O’Keeffe & Partners, we have advised clients on both approaches for over 50 years. This article explores the differences between sale & purchase and chartering, helping you decide which strategy best aligns with your business goals.

The Case for Vessel Sale and Purchase

Owning a vessel outright can offer long-term stability and potential for asset growth. Through a sale & purchase transaction, clients acquire ownership rights, giving them direct control over operations, employment, and fleet strategy.

Benefits of ownership include:

• Asset growth: Ships can appreciate in value, particularly in favourable market conditions.

• Operational control: Owners decide how vessels are deployed, maintained, and upgraded.

• Long-term security: No reliance on external charterers for fleet access.

Challenges of ownership include:

• High capital requirements: Significant upfront investment is needed.

• Operational responsibility: Owners manage crewing, maintenance, and compliance.

• Market risk: Asset values can fluctuate with freight rates and global demand.

Ownership is well-suited to companies with long-term strategic plans, access to capital, and a desire to build enduring fleets.

The Case for Chartering

Chartering, by contrast, provides access to vessels without the capital burden of purchase. It is a flexible arrangement that allows companies to secure employment for a ship for either a single voyage or a longer period.

Types of chartering include:

• Voyage charters: The vessel is contracted for a single journey between two ports.

• Time charters: The vessel is hired for a fixed period, with the owner maintaining responsibility for crewing and technical management.

• Bareboat (demise) charters: The charterer assumes full control, including crewing and operations, often as a step towards eventual ownership.

Benefits of chartering include:

• Lower upfront costs: No need for significant capital investment.

• Flexibility: Easy to scale up or down depending on market conditions.

• Risk management: Exposure is limited to the charter period, reducing vulnerability to market downturns.

Challenges of chartering include:

• Lack of ownership: No long-term asset value is built.

• Dependency: Charter availability depends on market supply.

• Costs over time: Long-term reliance on charters can become more expensive than ownership.

Chartering is ideal for companies seeking flexibility, reduced risk, or temporary fleet expansion.

Key Considerations for Decision-Makers

When deciding between sale & purchase and chartering, businesses should evaluate:

• Capital structure: Do you have the funds for acquisition, or is flexibility more valuable?

• Market conditions: Is it more cost-effective to own or to charter given freight rates and vessel values?

• Business model: Are you building a long-term fleet, or meeting short-term demand?

• Risk appetite: Are you prepared to take on asset risk, or do you prefer reduced exposure?

How O’Keeffe & Partners Help

Every client faces a unique set of challenges. At O’Keeffe & Partners, we tailor our advice and brokerage services to match each company’s strategy. For some, this means structuring innovative sale & purchase deals or managing fleet acquisitions. For others, it means arranging long-term time charters to provide stability and predictability in uncertain markets.

Our role is not only to execute transactions but also to act as trusted advisors guiding clients on market trends, financing opportunities, and long-term strategies. With over five decades of experience, we bring a blend of heritage and forward-thinking solutions.

The choice between sale & purchase and chartering is not one-size-fits-all. Both paths offer compelling advantages depending on your company’s goals, resources, and appetite for risk.

At O’Keeffe & Partners, we help clients navigate these decisions with discretion, professionalism, and deep market expertise. Whether you are considering vessel acquisition or securing long-term charter employment, we provide solutions built on trust and global reach.

Looking to discuss your fleet strategy?

Contact O’Keeffe & Partners to explore whether sale & purchase or chartering is right for your business.