Payment of Freight

The Physical Payment of Freight: In terms of the physical payment of freight, the money is paid in an account stipulated by the shipowner. The transfer must occur within the time period stipulated in the contract to avoid delays and possible complications.

Although in most occasions freight may be payable in advance, it is unlikely that the shipowner will receive the full sum prior to the vessel reaching its destination.

It is quite common for 90 percent of the freight to be paid before or during the voyage and the remaining 10 percent settled upon the completion of discharge together with adjustment for demurrage or dispatch owned by one party or the other.