Time Charter Equivalent Rate: Shipping Revenue per Available Day

Time charter equivalent rate, usually abbreviated TCE rate, is a shipping-industry measure that expresses vessel earnings on a per-day basis after subtracting specified voyage-related costs.

It is especially useful because voyage charters and time charters quote economics differently. TCE attempts to put them on a more comparable daily basis.

Common formula

A common presentation is:

1TCE Rate = (Voyage Revenue - Voyage Expenses - Other Specified Charter/Voyage Costs) ÷ Available Days

The exact numerator is issuer-defined.

Safe Bulkers defines TCE as revenues less commissions and voyage expenses divided by available days. Genco also subtracts charter-hire expense and realized fuel-hedge gains or losses. Star Bulk uses another issuer-specific reconciliation.

That means investors should never assume two reported TCE rates use perfectly identical adjustments.

Why TCE exists

Under a voyage charter, the shipowner commonly receives freight revenue and pays voyage costs such as bunkers and port charges. Under a time charter, the charterer generally bears many voyage costs and pays the owner a daily hire rate.

Comparing gross voyage revenue directly with a daily time-charter rate is therefore misleading.

TCE removes specified voyage costs and converts the remaining earnings to a daily rate.

Available days matter

TCE normally uses Vessel Available Days rather than calendar days.

If a fleet generates $150 million of TCE-adjusted revenue over 10,000 available days:

1TCE Rate = $150,000,000 ÷ 10,000
2         = $15,000 per available day

A change in drydocking or scheduled maintenance can change available days and therefore affect reported TCE even if market freight rates are unchanged.

TCE is not gross freight revenue

TCE is a net daily revenue-performance measure, not total revenue.

A company can report higher voyage revenue but lower TCE if voyage costs rise faster than revenue or if the fleet mix changes.

Likewise, higher TCE does not automatically imply higher company profit because vessel operating expense, charter-in cost, general and administrative expense, interest, depreciation, and drydocking economics still matter.

TCE versus daily vessel operating expense

A useful operating comparison is:

1TCE Rate
2versus
3Daily Vessel Operating Expense

But the difference is not a full profit margin. Daily Vessel Operating Expense generally excludes items such as depreciation, interest, corporate overhead, and often drydocking or voyage costs depending on the issuer definition.

Spot exposure versus period charters

TCE can move sharply when a fleet has greater exposure to spot freight markets. Period charters can make near-term earnings more stable but may limit upside when spot rates rise.

Investors should pair TCE with:

• charter duration;
• spot versus fixed-rate exposure;
• vessel class;
• trade route;
• fleet age;
• available days; and
• charter-in arrangements.

Cross-company comparability

Preserve the exact treatment of:

• voyage expenses;
• commissions;
• charter-hire expense;
• fuel hedges or bunker swaps;
• charter-in vessels;
• available-day definitions; and
• vessel classes.

Some issuers describe TCE as a non-GAAP measure; others present it as an operating performance measure. The reconciliation remains more important than the label.

Filing examples

Safe Bulkers' 2025 Form 20-F reports a 2025 TCE rate of $15,511 per day and defines TCE using revenue less commissions and voyage expenses divided by available days. Genco's 2025 Form 10-K reconciles voyage revenue to TCE and includes charter-hire expense and realized fuel-hedge effects in its calculation.

Sources:

• Safe Bulkers 2025 Form 20-F
• Genco Shipping & Trading 2025 Form 10-K
• Star Bulk Carriers 2025 Form 20-F

Bottom line

TCE rate converts shipping earnings to a daily basis after issuer-specified voyage and charter adjustments. It is one of the industry's most useful unit-revenue measures, but investors should preserve the numerator reconciliation, available-day denominator, fleet mix, and charter structure before comparing companies.

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