Wet Hire vs Dry Hire: Who Carries the Compliance Risk?

Dry hire looks like the cheaper option because the quote is smaller. You’re not paying for a skipper, so the day rate drops, and, on a long engagement, the savings are real money.

Then someone asks who signs off the safety management system, and the room goes quiet.

Choosing between wet and dry hire is not merely a staffing decision. It’s a decision about which obligations under Australian maritime law land on your organisation, which ones stay with the hire company, and which ones sit on both of you at the same time no matter what the contract says. Most contractors work that out after they’ve signed.

Here’s how the responsibility actually splits.

What Is the Difference Between Wet Hire and Dry Hire?

Wet hire means the vessel comes with a qualified skipper supplied by the hire company. Dry hire means you take the vessel alone and provide your own certificated master. The legal difference is that with dry hire, you take on overall general control and management of the vessel, which changes who holds duties under the national law.

That last sentence is doing most of the work, so the rest of this article unpacks it.

Dry hire is sometimes described as a bareboat or demise charter, borrowing language from commercial shipping. The concept is similar: possession and control move to the hirer. But the Australian domestic framework has its own definitions, and the shipping-law shorthand can mislead you about how cleanly responsibility transfers.

Why this is not the same as hiring a car

The car analogy is the reason so many people get this wrong. When you hire a car, the obligations that matter are mostly on you as the driver, and the rental company’s role ends at handover.

Vessels don’t work that way. Under the Marine Safety (Domestic Commercial Vessel) National Law Act 2012, duties attach to defined roles: the owner, the master, the crew, and people who design, build, supply, maintain or modify vessels. The hire company does not stop being one of those things because a vessel left the yard.

Who Is Legally Responsible on a Dry Hire?

On a dry hire, both parties can hold duties simultaneously. AMSA guidance notes that a vessel may have more than one owner, and that a person with overall general control and management may be an owner under section 6 of the national law. Dry hire doesn’t remove the hire company’s duty; it adds a second duty holder.

This is the point that reframes the whole decision. The word “owner” in the national law is a functional description, not a question of who holds title. If your organisation is directing where the vessel goes, who is aboard and what work it does, you may be an owner for the purposes of the legislation while the hire company remains one too.

The duties that sit with an owner under the national law include providing and maintaining the vessel so that it is safe; delivering information, instruction, training, or supervision to people on board as necessary for their safety; and implementing and maintaining a safety management system that ensures the vessel and its operations are safe. Masters carry their own duties, including implementing and complying with the SMS.

You cannot contract out of a statutory duty. An indemnity clause decides who pays whom after the fact. It does not affect who the regulator can prosecute. If your vessel lease agreement says the hire company “retains all compliance responsibility” for a vessel your team is directing and crewing, that clause may protect your commercial position and still leave your organisation squarely inside the definition of owner. Get the clause reviewed, but don’t treat it as a shield.

The Five Obligations and Who Holds Each One

Every commercial vessel hire has to satisfy five things. Work through them one at a time and the wet-versus-dry question answers itself.

Obligation	Wet hire	Dry hire	Shared regardless
Certificate of survey (the vessel meets the standard for its service category)	Hire company	Hire company	You must confirm the category suits your water and headcount.
Certificate of operation and SMS (Marine Order 504)	Hire company, operating under its own system.	Usually you, because you have general control and management.	The SMS must cover the actual operation being run, not a generic one.
Crewing and certificates of competency (Marine Order 505)	Hire company supplies and verifies.	You supply and verify, including checking the ticket covers the vessel and the area.	Nobody may perform duties requiring a certificate without holding one.
Marine incident reporting	Hire company, with your cooperation.	You and the hire company as owner.	Reportable incidents must be reported regardless of who was driving.
Insurance (hull, protection and indemnity, workers’ compensation)	Hire company for vessel and crew.	Split, and this is where most gaps appear.	Your workers’ compensation covers your people wherever they are.

Dry hire moves the operational obligations to you and leaves the asset obligations with the hire company. What it does not do is create a clean handover, because the fifth row exists.

The obligation people forget: the SMS has to match the job

A safety management system (SMS) is required for every domestic commercial vessel, including vessels exempt from holding a certificate of operation. It has to address the specific risks and conditions of the vessel, its operations, its area of operation, and its crew.

A generic SMS that describes “workboat operations in sheltered waters” does not cover a night transit in a tidal river with divers in the water. If you dry hire, you own that gap. Building an SMS that genuinely matches the operation takes longer than most project teams allow, typically a couple of weeks of real work rather than an afternoon of filling in a template, and it has to be done before the vessel starts work rather than during mobilisation.

Owners must also consult the master and crew when preparing or reviewing the SMS risk assessment. If you’re dry hiring and haven’t hired your master yet, you cannot finish that step.

Commercial Dry Hire Is Not “Hire and Drive”

Here’s a misconception worth killing outright, as it changes the entire compliance picture.

AMSA’s service categories define class 4 as a hire-and-drive vessel used by the hirer only for recreational purposes. Class 4 is the tinnie you rent for a fishing weekend. It carries its own specific requirements because the regulator assumes an untrained recreational user.

If your organisation dry-hires a punt or workboat to run a survey, install silt curtains, or move personnel to a bridge repair, you are not in class 4. You are operating a class 2 non-passenger vessel for commercial purposes, and every class 2 obligation applies to you: the certificate of operation and SMS, certificated crew, incident reporting, the lot.

Anyone who tells you dry hire is simpler because “it’s basically hire and drive” has confused two completely different categories. If you’re unsure which category the vessel sits in, our explainer on AMSA service categories covers how the number and letter are assigned.

Work Health and Safety Runs Alongside All of This

Maritime law isn’t the only regime in play. Your work health and safety duties operate concurrently, and they don’t care which hire model you chose.

If your workers are on that vessel, you have duties to them. If you’re the principal contractor on a site that includes on-water work, you have duties to everyone on it. WHS duties are also non-delegable in the sense that matters here: engaging a competent contractor is part of discharging your duty, not a substitute for having one.

This is why the honest version of the wet-versus-dry comparison is not “who is responsible” but “how much of the responsibility I can discharge by choosing a party who does this every day.” Wet hire doesn’t remove your duty. It means the person exercising day-to-day control is someone whose entire business is doing it correctly.

When Dry Hire Is Genuinely the Right Call

Dry hire is not a trap. It’s the right answer in specific conditions, and pretending otherwise would be self-serving.

Dry hire works when:

• You already employ certificated masters. If you have masters on staff with tickets covering the vessel length and operational area, you’re paying twice for a skipper you don’t need.
• You have a working SMS and the capability to extend it. Not a template. An SMS your organisation already operates under, with someone competent who can adapt it to this vessel and this job.
• The engagement is long. Over months, the daily savings compound and the fixed cost of setting up your own compliance framework amortises. Over a fortnight, it rarely does.
• The work is highly integrated with your own crew. Some operations run better when the person on the helm reports into your site structure rather than a third party.

Dry hire is usually the wrong call when the engagement is short, the water is unfamiliar, your team’s marine experience is thin, or nobody in your organisation can name who holds the certificate of competency that will be used. If you can’t answer that last one in a meeting, you’re not ready to dry hire.

The failure mode we see most often. A team dry-hires to save on the skipper, then quietly hires a freelance skipper anyway when the job gets close. Now you have the cost of a wet hire, the compliance burden of a dry hire, and a master with no relationship to either party’s safety system. That’s the worst of all three positions, and it happens because the decision was made on the day rate rather than on capability.

What Wet Hire Actually Buys You

Setting aside the vessel, wet hire buys three things that don’t appear on the invoice.

1. A master inside an established system. The skipper arrives already working under an SMS that covers the vessel, already certificated for the area, and already assessed by the operator. You verify it rather than build it.
2. Local judgement. An experienced skipper who has worked a particular estuary knows where the boundary sits, when the tide makes a ramp unusable, and which access point is genuinely available at low water. That knowledge shortens jobs in ways that are hard to quantify until you’ve run one without it.
3. A shorter document trail for your principal contractor. When a Tier 1 asks for the on-water compliance pack, a wet-hire operator hands over a complete set. On a dry hire, you assemble it.

Five Questions to Settle Before You Choose

Run these in a single meeting with procurement, the project engineer and your HSE lead in the room.

1. Who will be the master, by name, and does their certificate of competency cover this vessel’s length and operational area? If the answer is “we’ll sort that out,” the answer is wet hire.
2. Does an SMS exist today that covers this operation? Not a template, not the hire company’s generic one. One that describes the actual job.
3. Who is reporting a marine incident at 2 am? Work out the notification chain before you need it.
4. Where does workers’ compensation sit for everyone who will be aboard, including subcontractors and client representatives?
5. What does the hire agreement say about the allocation of statutory duties, and has anyone with legal training read that clause?

Answer those five honestly, and the model picks itself. In our experience, the organisations that choose dry hire correctly can answer all five in about 10 minutes because they already run marine operations. The ones that struggle usually discover at question two that they were about to take on an obligation nobody had costed.

Price the Obligation, Not Just the Day Rate

The saving on a dry hire is visible. The cost is not because it shows up as your people’s time building an SMS, verifying tickets, and carrying a duty your organisation may not be set up to discharge.

Before your next hire, take the five obligations above and write a name next to each one. A real name, not a company. If any line is blank, you’ve found the reason to go wet on this job.

Boab Commercial Marine offers both arrangements in multiple service areas across Australia, with a fleet of commercial vessels covering punts, workboats, and modular barges, and skippers certificated for the areas they work. If you’re weighing the two models for a specific job, the fastest way through is a conversation about the five questions above rather than a comparison of day rates. Our marine construction, survey and environmental services pages set out the kinds of operations we support.

Also, don’t hesitate to contact us if you have more questions or concerns. 

This article is general information about Australian domestic commercial vessel regulation and is not legal advice. Obligations depend on your specific operation and contract. Confirm current requirements with AMSA and seek your own advice on hire agreements.