Maritime Glossary

A unique 7-digit identifier assigned to every sea-going merchant ship by the International Maritime Organization. The IMO number remains unchanged throughout a vessel's lifetime, regardless of changes in name, flag, or ownership. Required for all ships of 100 GT and above.

A 9-digit number used to uniquely identify a ship's radio station in the Automatic Identification System (AIS). Unlike the IMO number, the MMSI can change when a vessel changes flag state.

The total weight a vessel can carry, including cargo, fuel, fresh water, ballast water, provisions, passengers, and crew. Expressed in metric tonnes. DWT is the primary measure of a vessel's cargo capacity and is used in ship finance to determine value.

A measure of a vessel's overall internal volume. Calculated from the total enclosed space of the ship using a formula defined in the International Convention on Tonnage Measurement of Ships (1969). Not a measure of weight. Used to determine port dues, manning requirements, and regulatory applicability.

A measure of the useful capacity of a vessel, calculated from the total volume of cargo spaces. Net tonnage is derived from gross tonnage and is used primarily for calculating canal transit fees (e.g. Suez Canal, Panama Canal) and harbour dues.

The country where a vessel is registered and whose maritime laws it must follow. The flag state is responsible for enforcing international regulations on its registered vessels. Open registries (flags of convenience) such as Panama, Liberia, and the Marshall Islands allow foreign-owned vessels to register, sometimes with weaker oversight.

An independent organisation that sets and verifies technical standards for the design, construction, and ongoing maintenance of ships. The International Association of Classification Societies (IACS) includes 11 members: Lloyd's Register, DNV, Bureau Veritas, ClassNK, ABS, RINA, CCS, KR, IRS, CRS, and PRS. Classification is required for insurance and port access.

Classification of a ship by its primary cargo or function. Common types include Bulk Carrier, Crude Oil Tanker, Product Tanker, Container Ship, LNG Carrier, LPG Carrier, Chemical Tanker, General Cargo, Ro-Ro, Passenger, and Offshore Supply Vessel. Vessel type affects risk profiles, insurance premiums, and regulatory requirements.

A unique alphanumeric identifier assigned to a vessel's radio station by the flag state. Used for maritime radio communications and distress calls. The call sign typically reflects the vessel's flag state through its prefix.

The weight of a ship excluding cargo, fuel, water, ballast, stores, passengers, crew, and their effects. LDT represents the weight of the steel and equipment in the ship itself. It is the key metric used in ship recycling to determine the scrap value of a vessel.

The vertical distance between the waterline and the bottom of the hull (keel). Maximum draught determines which ports and waterways a vessel can access. Summer draught is the maximum permitted under the International Load Line Convention.

The width of a vessel at its widest point. Beam determines whether a vessel can transit certain waterways (e.g. the Panama Canal's Neopanamax limit is 51.25m beam). Also affects stability characteristics.

A standard unit of measurement for container ship capacity, based on the dimensions of a standard 20-foot shipping container (20ft x 8ft x 8.5ft). A 40-foot container equals 2 TEU. The largest container ships exceed 24,000 TEU capacity.

The legal entity shown on the vessel's certificate of registry as the owner. In complex maritime structures, the registered owner is often a single-purpose company (SPC) that may differ from the commercial operator and beneficial owner. The registered owner bears legal liability for the vessel.

The natural person(s) or entity that ultimately owns or controls a vessel through a chain of corporate entities. Identifying the beneficial owner is critical for sanctions compliance and anti-money laundering (AML) purposes. Ownership structures can span multiple jurisdictions and layers.

A company responsible for the technical management of a vessel, including maintenance, crewing, insurance, and regulatory compliance. The ship manager may be different from the registered owner and the commercial operator. Major ship management companies include V.Ships, Anglo-Eastern, and Bernhard Schulte.

The entity that controls the commercial employment of a vessel — deciding which cargoes to carry, which ports to call, and negotiating freight rates. The commercial operator may charter the vessel from the registered owner under a time charter or bareboat charter.

A contract under which a shipowner hires out a vessel for a specific period. The charterer pays a daily hire rate and covers voyage costs (fuel, port charges), while the owner covers operating costs (crew, maintenance, insurance). Time charter rates are a key indicator of shipping market conditions.

A contract where a shipowner agrees to carry a specific cargo between named ports for an agreed freight rate. The owner bears all costs including fuel, port charges, and canal fees. Voyage charters are common for bulk commodities.

A charter arrangement where the charterer takes full control of the vessel, providing crew, insurance, and all operating costs. The owner receives only a basic hire payment. Bareboat charters are often used in ship finance as a form of operating lease.

The legal contract between a shipowner and a charterer that sets out the terms of the charter — vessel details, cargo, ports, duration, hire rate, laytime, and demurrage. Standard forms include BIMCO's GENCON (voyage) and NYPE (time charter).

A charge payable by the charterer to the shipowner when loading or discharging takes longer than the agreed laytime. Demurrage compensates the owner for the delay. The opposite is dispatch — a bonus paid to the charterer for completing operations early.

The transfer of cargo between two vessels moored alongside each other, typically at sea or at anchor rather than in port. STS operations in certain zones are a sanctions evasion indicator, as they can be used to obscure the origin of cargo, particularly crude oil. Legitimate STS operations occur regularly for lightering (reducing draught for port access).

A daily index published by the Baltic Exchange in London that tracks the cost of shipping dry bulk commodities (iron ore, coal, grain, etc.) on major global routes. The BDI is widely used as a leading indicator of global trade activity and economic health. It is compiled from freight rates reported by international shipbrokers.

The price charged for transporting cargo by sea. Expressed as a price per tonne of cargo (voyage charter), a daily hire rate in US dollars (time charter), or a rate per TEU (container shipping). Freight rates are driven by supply and demand for shipping capacity.

A corporate entity established to own a single vessel. SPCs are standard in ship finance because they isolate the lender's collateral (the ship) from the borrower's other liabilities. Also known as a Special Purpose Vehicle (SPV) in broader finance.

The inspection of foreign ships in national ports to verify that the condition of the ship and its equipment comply with international regulations. PSC inspections can result in deficiencies, detentions, or bans depending on severity. Results are shared between MOU member states.

Regional agreements between maritime authorities to coordinate PSC inspections. The Paris MOU covers Europe and the North Atlantic (27 member states). The Tokyo MOU covers the Asia-Pacific region (21 member authorities). Both maintain white, grey, and black flag performance lists based on detention rates.

The action taken by a port state control authority to prevent a vessel from sailing until identified deficiencies have been rectified. Detentions are publicly recorded in MOU databases and negatively impact a vessel's inspection record, the flag state's performance, and the managing company's reputation.

A condition found during a PSC inspection that does not conform to the relevant convention requirements. Deficiencies range from minor (documentation issues) to serious (structural failures, missing safety equipment). Multiple serious deficiencies in a single inspection increase the likelihood of detention.

An IMO framework requiring shipping companies to establish a Safety Management System (SMS) covering safety policies, designated persons ashore, emergency procedures, and internal audits. ISM compliance is verified through Document of Compliance (DOC) for companies and Safety Management Certificate (SMC) for individual vessels.

An IMO security framework introduced after 9/11 that establishes requirements for ships, ports, and government agencies to detect and deter security threats. Ships must carry an International Ship Security Certificate (ISSC) and maintain a Ship Security Plan. Three security levels (1-3) dictate escalating measures.

The International Convention for the Safety of Life at Sea, the most important maritime safety treaty. First adopted in 1914 after the Titanic disaster, SOLAS covers construction standards, fire protection, life-saving appliances, radio communications, safety of navigation, and carriage of dangerous goods.

The International Convention for the Prevention of Pollution from Ships. MARPOL has six annexes covering oil pollution (I), noxious liquid substances (II), harmful substances in packaged form (III), sewage (IV), garbage (V), and air pollution (VI). Annex VI includes the Energy Efficiency Design Index (EEDI) and CII requirements.

Restrictive measures imposed by governments or international bodies to prohibit trade, financial transactions, or travel involving designated individuals, entities, or countries. Maritime sanctions typically target vessels, owners, operators, and flag states. Key sanctions regimes include OFAC (US), EU, UK (FCDO), UN Security Council, and MAS (Singapore).

A list maintained by the US Treasury's Office of Foreign Assets Control (OFAC) identifying individuals and entities whose assets are blocked and with whom US persons are generally prohibited from dealing. The SDN list includes vessel IMO numbers and is a primary reference for maritime sanctions screening.

Due diligence procedures used by financial institutions to verify the identity of clients and assess potential risks of illegal activity. In maritime finance, KYC extends to vessel ownership chains, beneficial owners, operators, and counterparties involved in shipping transactions.

The corporate equivalent of KYC — due diligence procedures to verify a business entity before establishing a relationship. KYB goes further than KYC because it requires verifying the company itself (registration, legal status, jurisdiction), identifying the ultimate beneficial owners (UBOs) behind it, and then running KYC on those individuals. It also involves assessing company structure, ownership chains, and whether any connected parties are sanctioned or high risk.

A set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. In maritime finance, AML compliance requires screening vessel ownership chains, monitoring transaction patterns, and reporting suspicious activity. The Financial Action Task Force (FATF) sets international AML standards.

An individual who holds or has held a prominent public function — heads of state, senior politicians, judicial officials, military officers, or senior executives of state-owned enterprises. PEPs and their close associates are subject to enhanced due diligence in financial transactions due to elevated corruption and money laundering risk.

An IMO measure of a vessel's carbon emissions per unit of transport work (grams of CO2 per tonne-nautical mile). Ships are rated A (best) to E (worst) annually. From 2024, vessels rated D for three consecutive years or E in any year must submit a corrective action plan. CII requirements tighten annually through 2030.

A one-time technical efficiency calculation required for all existing ships above 400 GT, measuring design efficiency in grams of CO2 per tonne-mile. Ships that do not meet the required EEXI must implement technical modifications such as engine power limitation (EPL) to reduce maximum power output.

A measure of energy efficiency for new-build vessels, expressing CO2 emissions per unit of transport work. EEDI phases (0 through III) progressively tighten efficiency requirements for new ships. Phase III (2025 onwards) requires 30-50% improvement over the baseline depending on vessel type.

An EU regulation (effective January 2025) that sets a maximum greenhouse gas intensity limit for energy used by ships calling at EU ports. The limit tightens from 2% reduction in 2025 to 80% by 2050. Ships must use certified fuel pathways or pay a penalty. Pooling allows over-performing vessels to offset under-performers.

A framework for integrating climate considerations into lending decisions for shipping. Signatory banks (covering ~80% of global ship finance) commit to measuring and disclosing the carbon intensity of their shipping portfolios against IMO decarbonisation trajectories. Vessels are assessed as 'aligned' or 'misaligned'.

Extension of the EU's carbon cap-and-trade system to maritime transport from January 2024. Shipping companies must purchase EU Allowances (EUAs) to cover CO2 emissions from voyages within the EU (100%), voyages to/from the EU (50%), and at-berth emissions. The phase-in covers 40% (2024), 70% (2025), and 100% (2026).

An IMO convention (entered into force June 2025) establishing standards for the safe and environmentally sound recycling of ships. Requires vessels to carry an Inventory of Hazardous Materials (IHM) and be recycled only at approved facilities. Ships must obtain a Ready for Recycling Certificate before demolition.

Designated sea areas where stricter emission standards apply under MARPOL Annex VI. Ships operating in ECAs must use fuel with a maximum sulphur content of 0.10% (compared to 0.50% globally). Current ECAs include the Baltic Sea, North Sea, North American coast, and US Caribbean.

An EU directive requiring companies to report on environmental, social, and governance (ESG) impacts using European Sustainability Reporting Standards (ESRS). For shipping companies, this includes fleet-level emissions, decarbonisation pathways, biodiversity impacts, and social factors including crew welfare.

A mutual insurance association providing cover against third-party liabilities to shipowners, including personal injury to crew and passengers, cargo damage, pollution, wreck removal, and collision liability. The 12 principal P&I clubs in the International Group insure approximately 90% of the world's ocean-going tonnage.

Insurance covering physical damage to the vessel's hull, machinery, and equipment. H&M policies typically cover perils of the sea, fire, collision, grounding, and machinery breakdown. The insured value is usually the market value or an agreed value of the vessel.

Additional insurance covering losses arising from war, civil war, revolution, piracy, terrorism, and related perils. War risk premiums increase significantly for vessels trading in designated high-risk areas. The Joint War Committee (JWC) of Lloyd's Market Association publishes a list of areas requiring additional war risk cover.

Insurance that compensates a shipowner for loss of income when a vessel is unable to trade due to damage covered by the H&M policy. LOH policies typically have a deductible period (e.g. 14 days) and a maximum indemnity period (e.g. 180 days).

When a vessel is completely destroyed, ceases to exist as the type of vessel insured, or the owner is irretrievably deprived of the vessel. An ATL triggers payment of the full insured value. Maritime total losses have declined significantly over the past decade due to improved safety standards.

When the cost of repairing a vessel exceeds its insured value, or when it is reasonably abandoned because an ATL appears unavoidable. The owner may claim a CTL and recover the full insured value by ceding the vessel to the insurer.

A security interest granted by a shipowner to a lender over a vessel as collateral for a loan. Ship mortgages are registered with the vessel's flag state. In the event of default, the mortgagee can arrest and sell the vessel to recover the debt. Priority of maritime liens and mortgages varies by jurisdiction.

The ratio of the outstanding loan balance to the current market value of the vessel. Shipping loan covenants typically require LTV below 60-75%. If vessel values decline and LTV exceeds the covenant, the borrower must provide additional security or make prepayments.

The ratio of a vessel's or fleet's net operating income to its debt service obligations (principal + interest). A DSCR above 1.0x means the vessel generates sufficient cash flow to cover debt payments. Shipping loan covenants typically require DSCR of 1.1x to 1.3x.

A vessel currently under construction or contracted for construction at a shipyard. Newbuilding contracts specify the vessel's specifications, delivery date, and price, typically payable in instalments during construction. Newbuilding prices are a key indicator of shipping market sentiment.

The market price of a vessel on the secondhand (sale and purchase) market. Vessel values fluctuate based on freight rates, newbuilding prices, vessel age and condition, and market outlook. Secondhand values are critical for loan-to-value covenant monitoring in ship finance.

The demolition value of a vessel, based on its light displacement tonnage (LDT) multiplied by the prevailing scrap steel price at recycling yards (primarily in the Indian subcontinent — Bangladesh, India, Pakistan, and Turkey). Scrap value sets the floor price for aged vessels.

The daily cost of running a vessel, including crew wages, insurance, maintenance, stores, lubricants, and management fees. OPEX excludes fuel (voyage costs) and capital costs (loan repayments). Typical OPEX ranges from $5,000-$12,000/day depending on vessel type and size.

A standard shipping industry metric that converts voyage charter revenue to a daily rate comparable to time charter rates. TCE = (voyage revenue - voyage costs) / voyage days. Used to compare the profitability of different employment options for a vessel.

Vessels operating outside normal commercial practices — typically ageing tankers with obscured ownership, inadequate or fraudulent insurance, frequently disabled AIS transponders, and involvement in sanctions evasion. The shadow fleet has grown significantly since 2022, estimated at 600-900 tankers globally, primarily transporting Russian, Iranian, and Venezuelan crude oil.

A period when a vessel's AIS transponder is switched off or spoofed, making the vessel invisible to tracking systems. Dark voyages are a key indicator of sanctions evasion, illegal fishing, or other illicit activity. Legitimate reasons for AIS gaps include equipment failure and passage through piracy zones.

The practice of frequently changing a vessel's flag state registration, often to avoid sanctions enforcement, escape detention records, or evade regulatory requirements. Frequent flag changes (especially to open registries with weak oversight) are a risk indicator.

The deliberate use of complex corporate structures across multiple jurisdictions to conceal the true beneficial owner of a vessel. Multi-layered ownership through shell companies in jurisdictions with weak disclosure requirements (e.g. Marshall Islands, British Virgin Islands) is both common in legitimate shipping and a sanctions evasion technique.

The risk associated with a vessel's flag state, beneficial owner jurisdiction, or trading patterns. Vessels flagged in or trading with sanctioned countries (Iran, North Korea, Russia, Syria, Venezuela) face elevated compliance risk. Country risk also considers the flag state's PSC performance on MOU black/grey/white lists.

A vessel's visit to a port, from arrival (pilot boarding or anchorage) to departure. Port call data includes the port name, country, arrival and departure times, and the duration of stay. Port call patterns are used for sanctions monitoring, trade analysis, and operational efficiency assessment.

Fuel used to power a ship's engines and auxiliary systems. The main types are Heavy Fuel Oil (HFO), Very Low Sulphur Fuel Oil (VLSFO, 0.50% sulphur), Marine Gas Oil (MGO, 0.10% sulphur), and Liquefied Natural Gas (LNG). Since IMO 2020, the global sulphur cap is 0.50% unless scrubbers are fitted.

An exhaust gas cleaning system that removes sulphur oxides (SOx) from a vessel's engine exhaust. Scrubbers allow ships to burn cheaper high-sulphur fuel oil while meeting IMO 2020 emission standards. Types include open-loop (seawater wash), closed-loop (chemical wash), and hybrid systems. Some ports ban open-loop scrubber discharge.

The process by which oil companies, charterers, and terminal operators assess whether a vessel meets their safety and commercial standards before accepting it for trade. Major vetting systems include SIRE (Ship Inspection Report Programme) by OCIMF for tankers and CDI (Chemical Distribution Institute) for chemical tankers.

The periodic removal of a vessel from the water for inspection, maintenance, and repair of the hull, propeller, rudder, and underwater fittings. Classification societies require dry docking at intervals of 2.5 to 5 years depending on vessel age and condition. Dry dock duration typically ranges from 10-30 days.

A vessel carrying cargo. The opposite of 'in ballast' (sailing empty to the next loading port). Laden voyages generate revenue while ballast voyages represent a cost. The ratio of laden to ballast days is a measure of fleet operational efficiency.

Seawater taken aboard to maintain vessel stability and trim when sailing without cargo. The Ballast Water Management Convention (BWM, 2017) requires ships to install treatment systems to prevent the transfer of invasive aquatic species between ecosystems. Compliance is verified during PSC inspections.

A tracking system using VHF radio transponders on ships. AIS broadcasts vessel identity (MMSI, IMO, name), position (latitude, longitude), course, speed, and voyage data (destination, ETA, draught) at intervals of 2-10 seconds while underway. All vessels over 300 GT on international voyages are required to carry AIS under SOLAS.

A satellite-based vessel tracking system mandated by SOLAS that reports vessel position to flag state authorities four times daily. Unlike AIS, LRIT data is not publicly available and is shared only between governments. LRIT provides position data even when AIS is disabled.

A public maritime safety database funded by the European Commission and the French Maritime Administration. Equasis provides vessel particulars, ownership history, classification details, PSC inspection records, and P&I club information. Free to access and widely used as a primary reference source for maritime due diligence.

The Global Integrated Shipping Information System operated by the International Maritime Organization (IMO). GISIS provides official records of IMO numbers, ship particulars, company information, seafarer documentation, and casualty investigations. Access to some modules requires IMO member state credentials.