Ad valorem freight

Ad valorem freight is freight assessed as a percentage of the declared cargo value rather than on weight or measurement. Carriers apply it to high-value goods such as specie, bullion, fine art, and precious metals, where the freight risk tracks value, not volume. The shipper declares the value on the bill of lading, and that declaration also lifts the carrier’s liability ceiling above the Hague-Visby package limit of 666.67 SDR per package or 2 SDR per kilogram. Without an ad valorem declaration the carrier prices on a weight-or-measurement basis and caps liability at the convention figure.