Dead Freight
Dead freight refers to the charges the shipper must pay when they reserve cargo space but fail to use it or cancel it after booking. Carriers allocate vessel or aircraft space based on bookings, so unused space results in financial loss. Dead freight compensates the carrier for this lost revenue. It also encourages accurate forecasting and responsible booking by shippers.
These charges apply when the cargo loaded is less than what was originally booked. For example, if a shipper books space for 10 tonnes but only delivers 6 tonnes, the carrier may charge dead freight for the unused 4 tonnes. The amount is typically calculated based on the agreed freight rate. This ensures fairness and helps carriers maintain stable operations.
Dead freight also protects carriers from unexpected last-minute changes. Sudden cancellations disrupt vessel planning, weight balancing, and space allocation for other customers. By implementing dead freight charges, carriers maintain consistency across their schedules. Shippers, therefore, benefit from smoother service and reliable capacity when they book responsibly.
Overall, dead freight is an important part of freight contracting. It keeps the booking system efficient, reduces revenue losses for carriers, and promotes accurate shipment planning. Understanding how dead freight works helps shippers avoid unnecessary charges and maintain strong working relationships with carriers and forwarders.
Frequently Asked Questions about Dead Freight
Clear answers to the most common questions people have when learning about Dead Freight.
Dead freight is charged when the shipper books more space than needed or cancels space too late, leaving the carrier unable to reallocate it.
Yes. Accurate forecasting, timely communication, and making adjustments before the carrier’s cut-off time help prevent these charges.
Not exactly. Cancellation fees apply when bookings are cancelled, while dead freight applies when booked space is unused, even if the shipment still moves.