Tanker (Time) Charter Equivalents


The operating performance of a particular tanker company's spot tanker segment can be measured in net revenues per revenue day, or time-charter equivalent (TCE), and includes the effect of forward freight agreements (FFAs) which may be entered into as hedges against a portion of the Company's exposure to spot market rates.

Consistent with general practice in the tanker shipping industry, time charter equivalent, or TCE, is a measure of the average daily revenue performance of a vessel on a per voyage basis. One method of calculating TCE, consistent with industry standards, is to divide net voyage revenue by voyage days for the relevant time period. Net voyage revenues are calculated as voyage revenues minus voyage expenses. Voyage expenses usually consist primarily of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract, as well as commissions.