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Freight

Money charged by a carrier for transporting goods. The term freight includes the profit derivable by a ship-owner from the employment of his ship to carry his own goods or movables as well as freight payable by a third party but does not include passage money.
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UK: Reward payable to a shipowner for the carriage of goods including the profit he derives from carrying his own goods, or other people’s goods but not including any passage money. Advance freight paid to the shipowner on a nonrefundable basis is at the risk of the shipper and merged with the cargo’s insured value. When freight is payable on ‘out-turn’ of the goods at the destination it is at the risk of shipowner and insurable by him. The term ‘freight’ has also been used to describe the goods themselves and has been adopted by ‘freight forwarders’ who handle shipments. Chartered freight is payable by a charterer to a shipowner and insurable by him unless paid in advance at the risk of the charterer.
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The income of the ship owner from carrying cargo or earned by the employment of his ship.

Freight collision clause

Clause incorporated in freight policies to cover threefourths of the shipowner’s liability for collision damage that may attach to freight. The clause is used only where freight is liable to be called upon to contribute to collision liability, i.e. where certain foreign laws may apply to the settlement. In English law freight is not taken into account in assessing the shipowner’s liability for collision.

Freight Forwarder

A specialist in handling overseas shipping details of exports and imports.
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UK: Party that arranges the shipping of goods overseas but does not normally take possession of the goods. Freight forwarders operate under the British International Freight Association Conditions 2000. The conditions limit liability to 2 SDRs (approx.) per tonne subject to a cap based on the value of the goods. Claims should be made within 14 days of awareness of the ‘event’, legal actions should be brought within 9 months. The maximum liability for delay is twice the amount of carriage charges
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These are intermediaries having close relationship with the shipper, consignee, ship-owners and their Agents. They act as shipper’s antenna and providers them all shipping information relating to developments in shipping services, tendencies in freight rates, handling & storage facilities in ports etc.

Freight insurance

The insurance of the freight earned by shipowners. Shipowners usually insure freight for 12 months by fixing an amount that could be earned on any one round voyage. Bill of lading freight is normally paid in advance and added to the value of the goods by the cargo owner. The insurable value of freight is the gross value of freight receivable by the shipowner plus the cost of insurance. See also FREIGHT; FREIGHT COLLISION CLAUSE.

Freight Policy

Freight, Chartered or Anticipated/Time Charter Hire/Passage Money-Time/Voyage : The earnings of a vessel described as freight for time can be insured up to 25% of the hull value provided no additional Insurances on disbursements are placed. The Policy is subject to Institute Time Clauses – Freight, 1.10.1983, provides an indemnity for loss of freight but not exceeding the gross freight lost. Any claim consequent on loss of time, whether arising from a peril of the seas or otherwise is expressly excluded. Further, the underwriters does not cover partial loss of freight, other than GA loss, under 3% unless caused by fire, sinking, stranding or collision with another vessel. In the event of total loss (actual or constructive) of the vessel, the freight is paid in full, whether the vessel be fully or partial loaded or in ballast, chartered or unchartered. The contributions of Freight towards GA, salvage charges and Sue and Labour expenses also covered.

Frequency loss

A type of loss that combines high probability with low impact, the predictable nature of which means that it can usually be assumed and managed, e.g. shoplifting, minor mechanical breakdowns.