What Are Charter Hours and How Are They Used?

Charter hours are an important concept when it comes to transportation and logistics. But what exactly are charter hours and how are they used? This article will explain charter hours in simple terms, providing a clear overview of this topic.

Defining Charter Hours

Charter hours refer to the total number of hours that drivers, buses, vans, or other vehicles spend providing charter service. Charter service means providing transportation to a specific group that has contracted for the service, as opposed to public transportation open to any paying customer.

For example, if a bus company is hired to provide transportation for a school field trip, the hours spent transporting the students would count as charter hours. Or if a company charters a van to shuttle employees from a parking lot to the office, the driver’s time operating that van is counted as charter hours

How Charter Hours Are Tracked and Used

Companies that provide charter transportation services carefully track charter hours to properly allocate costs and revenues. The total charter hours across all vehicles in the fleet during a period provides useful data. Here are some of the main ways charter hours are used:

• Billing clients – Companies bill their charter clients based on the number of charter hours used. The charter hours logged for a particular job are multiplied by the hourly charter rate to determine the total fee.

• Paying drivers – For drivers who work on charter services, their wages may be based on the number of charter hours they drive. Their pay stubs would show regular and overtime charter hours.

• Performance metrics – Managers can use overall charter hours as a metric to evaluate company performance Growth in charter hours over time can indicate increasing demand for services

• Cost analysis – Accounting uses total charter hours to allocate vehicle costs like depreciation, maintenance, licensing, inspection, insurance, and storage. This ensures charter services carry their fair share of operating costs.

• Compliance – Government regulations outline how drivers can log hours providing charter service versus other types of passenger transportation. Careful charter hour tracking ensures compliance.

Charter Hours vs. Other Types of Hours

In transportation operations, many types of hours come into play. Charter hours are kept distinct from other categories like:

• Route hours – Time spent operating vehicles on regular public transportation routes.

• Deadhead hours – Time spent driving without passengers, often to move vehicles between storage and service locations.

• Standby hours – Time drivers wait on standby for charter assignments.

• Delay hours – Time spent delayed due to weather, traffic, vehicle issues, or other problems.

Proper categorization of hours is essential for accurate recordkeeping and costing. For instance, the same driver time cannot be counted as both charter and route hours.

Examples of Charter Hour Usage

To further demonstrate how charter hours work, here are some examples:

• A motorcoach company provides a bus and driver for a youth hockey team trip. The bus leaves at 8:00 am transporting the team to a tournament 3 hours away. It drops the team off at 11:00 am. The bus idles as the driver waits nearby. At 4:00 pm, the driver collects the team after the tournament and drives 3 hours back, arriving at 7:00 pm. The driver logged 11 total hours (8 am to 7 pm), so there would be 11 charter hours for this job.

• An employee shuttle service sends two vans with drivers to an office campus every weekday morning and afternoon. Each van driver logs 2 hours transporting employees in the morning and 2 hours in the afternoon. So each van records 4 charter hours per day, or 20 weekly charter hours.

• A sightseeing company operates a chartered tour bus every Saturday. The bus leaves the depot at 10 am and returns at 4 pm after a 6 hour local tour. The driver’s 6 hours are recorded as charter hours. If the bus makes a second 6 hour tour on Saturday, that driver time also counts as 6 more charter hours.

Key Takeaways