A charge paid for carriage or transportation of goods by air, land, and sea.

Type of Frights:

Advance Freight:

This is payable in advance, before delivery of the actual goods. This is generally regarded as the most important type of freight and is extensively used in the liner cargo trades and tramping.

Lump sum Freight:

A fixed sum is payable by the charterers for the capacity made available to them by the ship owner.

Dead Freight:

Charge payable on space booked on a ship but not utilized by the charterer or the shipper. It is imposed at full freight rates, less loading and handling charges. E.g., if the charter party agreement was that the charterers would load 50,000 tons of wheat, but he loaded only 40,000 tons, the ship owner will claim dead freight on 10,000 tons at the agreed rate of freight.

Back Freight:

This arises when goods have dispatched to a certain port, and on arrival are refused. The freight charged for the return of the goods constitutes Back Freight.

Pro-Rata Freight:

Pro-rata freight is payable in common law where only part of the voyage has been completed, e.g. when the voyage is abandoned following an outbreak of war or an accident, and the cargo is discharged at an intermediate port. It is not “freight” in the normal sense, but the ship owner’s compensation for carrying the goods at least part-way to their destination.

Ad Valorem Freight:

Ad valorem freight is charged at a rate stated as a percentage of the value of a shipment, usually of high-value goods, e.g. bullion. It is not normally used in voyage charter parties, generally being confined to liner shipments.

 

Advertisements