What is the freight payment rule if the ship is lost?

In maritime commerce, the freight payment rule typically dictates that if a ship is lost during transit, the freight payment must be made for the distance that the ship successfully traveled before the loss occurred. This principle acknowledges that the carrier has performed part of the service by transporting the cargo partway to its destination; hence, they are entitled to compensation for that service.

The rationale behind this rule is based on the understanding that the carrier has incurred costs, taken risks, and provided value for the portion of the journey that was completed. Therefore, it is common practice to settle the freight charges proportional to the distance covered, as the cargo owner is relieved of the obligation to pay for the unsatisfied part of the service due to the loss of the vessel.

This approach ensures fairness to both parties involved—the carrier receives compensation for services rendered, while the cargo owner is not unduly penalized when the total intended service cannot be fulfilled due to unforeseen circumstances.