If charterers fail to provide the agreed quantity of cargo to shipowners, shipowners typically be entitled to compensation for their loss of earnings which is known as deadfreight. For example:
60,000 mtons 10% MOLOO (More or Less in Owners Option), the captain (master) will calculate the loadable quantity with reference to any draft restrictions at the intended ports, rivers and berths to be used, the ship’s cubic capacity and stowage factor (SF) of the cargo. Within the above cargo description, the captain (master) may call for any quantity between 54,000 mtons and 66,000 mtons. Suppose the captain (master) called for 65,000 mtons, but charterers could supplied only 60,000 mtons. Charterer will pay compensation to shipowners on 5,000 mtons shortfall which is known as deadfreight.