Dead Freight

Dead Freight

Summary of Dead Freight

A payment made by a charterer to the owner of a vessel as compensation for stowing the ship to less than its capacity. The charterer is bound to ship a “full and complete cargo”; since freight is payable only on the cargo actually shipped, failure to deliver a full load deprives the vessel owner of revenue. Dead freight is calculated by ascertaining the freight that would have been payable had additional cargo been shipped to fill out the vessel, less any expenses the shipowner would have borne if the additional cargo had been shipped.

(Main Author: William J. Miller)

Dead Freight in International Trade

Meaning of Dead Freight, according to the Dictionary of International Trade (Global Negotiator): Compensation for cargo agreed to be shipped but unshipped (usually because it was unavailable for loading). In liner terms dead freight can also mean compensation due to a ship line because the shipper failed to meet a pre-agreed quantity commitment under a service contract.


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