Marco Bozem
Independent hard-asset investor. Covers shipping, mining & energy dividends from a real private-investor portfolio.
MB Capital Strategies Glossary — Updated June 2026
TCE Rate (Time-Charter Equivalent) is the single most important metric in shipping stock analysis. It converts every contract type — spot voyage, time-charter, COA — into one standardized number: daily net revenue per vessel ($/day).
Voyage costs include: bunker fuel (the largest variable), port fees, canal tolls, and loading/discharge costs. Time-charter revenues are already net of these costs, so TCE = hire rate. Spot voyages need the calculation.
Shipping dividends are paid from free cashflow — and free cashflow tracks TCE rates closely. A tanker earning $50,000/day vs. $30,000/day generates roughly 67% more distributable cash per vessel. That's why shipping stock prices and dividends fluctuate with freight rates.
These three terms are often confused:
A company with 40% time-charter coverage at $35,000/day and 60% spot exposure at $50,000/day would report a blended TCE near $44,000/day for the quarter.
Every shipping company has a daily operating break-even — typically $15,000–$25,000/day for modern tankers. The spread between TCE and break-even is the profit margin per vessel. When TCE rates compress toward break-even (as in the 2020 trough at ~$8,000/day for VLCCs), dividends are cut or suspended entirely.
Independent hard-asset investor. Covers shipping, mining & energy dividends from a real private-investor portfolio.