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How Do Ships Generate Revenue?

Shipfinex image with ship's control room, ocean view, and screen displays. Text: "How Does a Ship Make Revenue?" Newsletter. Blue theme.

At Shipfinex, we believe that an educated owner is a confident owner. When you buy a Maritime Asset Token (MAT), you are gaining exposure to the backbone of global trade.

But unlike a bond or a savings account, a ship is a dynamic asset. Its earnings are driven by real-world commercial activity.


To truly evaluate an asset's potential, you need to understand the mechanism behind its earnings. In the maritime industry, revenue is generally derived from two distinct commercial strategies.


1. The Spot Market


Think of this as the "Market-Linked" strategy.


In the Spot Market, a ship is contracted for a single, specific voyage. For example, transporting grain from Brazil to China. The price is negotiated based on immediate supply and demand dynamics.


  • The Thesis: This strategy offers maximum exposure to market volatility. When global demand for shipping outpaces supply, spot rates can surge.

  • The Trade-Off: It carries higher variance. If market demand cools, the vessel may face waiting periods between voyages, during which revenue might get  paused.

  • Cost Structure: In this model, the Ship Owner typically covers voyage costs, such as fuel (bunkers) and port fees.


2. The Time Charter


Think of this as the "Fixed-Income" style strategy.

Under a Time Charter, a client (the Charterer) leases the ship for a fixed duration (ranging from months to years) at a pre-agreed daily rate.


  • The Thesis: This strategy prioritizes stability. It locks in predictable cash flows, shielding the asset from short-term market downturns. It allows for precise forward-looking financial planning.

  • The Trade-Off: It caps the upside. If the market rallies significantly during the charter period, the ship remains locked at the pre-agreed rate.

  • Cost Structure: Usually, the Charterer assumes the cost of fuel and port charges. The Ship Owner is responsible only for the vessel's technical operation.


Spot vs. Time: Which Approach is Superior?


Graph with a blue background shows red fluctuating line labeled "Spot Market" over time. Text: "Earnings," "Time," "Spot Market," "Time Charter."

Maritime experts know that "superiority" depends on your objective.

  • Spot assets are often favored by those seeking aggressive growth and who are comfortable with market fluctuations.

  • Time Chartered assets are typically preferred by those seeking steady, defensive earnings and reduced volatility.


On the Shipfinex platform, the offering for each asset explicitly outlines its commercial profile. This transparency allows you to build a portfolio that aligns with your specific risk appetite, whether you prefer the stability of a contract or the potential of the open market.


Operational Reality: The Importance of "Uptime"


Regardless of the contract type, there is one fundamental rule of shipping: Earnings requires availability.


A ship only generates revenue when it is operational. If a ship faces technical downtime (known as being "Off-Hire"), the revenue stream could pause. This is why the quality of the Technical Manager is paramount. Their ability to maintain the asset ensures that the ship remains active and efficient.


Looking Ahead


Revenue is only the top line. To arrive at the true earnings that flows to your wallet, we must account for the cost of running the ship.


Next week, we will provide a deep dive into Operational Expenses (OPEX). We will break down the essential costs (from crew welfare to insurance) that preserve the value of your asset and ensure its longevity.


Until next time,


Team Shipfinex


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