Guaranteed freight

Guaranteed freight is freight the charterer or shipper agrees to pay regardless of whether the cargo arrives, deemed earned on shipment and not refundable on loss of ship or goods. It is the contractual cousin of advance freight: the clause moves the freight risk onto the cargo side and assures the owner of revenue once loading is complete. The charter party states it expressly, often as freight deemed earned on shipment, ship and or cargo lost or not lost. Owners insist on it in volatile trades; charterers in turn insure the prepaid freight as part of cargo cover.