Freight
Meaning
Freight is the payment a charterer makes to the owner for carrying cargo under a voyage charter, quoted per tonne, as a lumpsum or in Worldscale.
Freight explained
On tankers, freight is usually quoted in Worldscale points, as a lumpsum for the voyage, or occasionally in dollars per tonne. Freight covers the voyage itself and the agreed laytime; time beyond that is paid separately as demurrage.
Most tanker charters say freight is earned on loading and payable on completion of discharge, deductions excluded. That means the owner keeps the freight even if the cargo is lost after loading.
Related terms
Worldscale
Worldscale is the index used to price tanker freight: a route's flat rate is WS 100, and fixtures are agreed as a percentage of it, such as WS 60.
Lumpsum freight
Lumpsum freight is a single fixed amount for the whole voyage, regardless of how much cargo is actually loaded within the agreed range.
Freight earned on loading
Freight earned on loading means the owner has earned the full freight once the cargo is loaded, even if it is later lost, and it is not returnable.
Deadfreight
Deadfreight is compensation the charterer pays when it loads less cargo than it agreed to supply, for the unused space it reserved.
TCE
TCE (time charter equivalent) converts a voyage's freight into daily earnings: freight minus voyage costs, divided by the days the voyage takes.