What is a freight rate?
A freight rate is the price a charterer pays a shipowner to carry a parcel of cargo from one named port to another under a voyage charter. In dry bulk it is quoted in USD per metric ton of cargo loaded, so the unit of pricing is the cargo itself rather than the ship or the day.
The per-ton convention is what makes the freight rate so useful to a commodity trader. Dry bulk cargo (iron ore, coal, grain, bauxite, fertiliser) is bought and sold by weight, so a rate expressed per ton folds directly into the landed cost of the commodity. A buyer comparing two owners for the same 60,000 ton parcel of grain from the US Gulf to Egypt can line up two per-ton quotes side by side and pick the cheaper carriage without doing any further arithmetic. That comparability is why USD per ton, not USD per day or a single lump sum, is the market standard for voyage fixtures.
Under a voyage charter the owner stays in operational command of the ship and pays the fuel, the port disbursements and the canal dues. The charterer pays one number, the freight, against the agreed cargo quantity. Everything the owner spends to move the cargo has to be recovered inside that per-ton rate, which is why the rate is sensitive to fuel prices and port costs as well as to the supply of ships. This is the single most important thing to understand about voyage freight: the rate is all-in for the owner’s voyage costs, not a fee on top of them.
Lump-sum freight vs per-ton freight
There are two ways to express voyage freight, and the choice changes who carries the risk on the exact cargo quantity loaded.
Per-ton freight is the default. The rate is multiplied by the actual tonnage loaded, as recorded on the bill of lading, so the owner is paid for what was carried. If the shipper presents less cargo than expected, the owner earns less freight, which is why owners protect themselves with a minimum quantity and a deadfreight clause for cargo that was contracted but not presented.
Lump-sum freight is a single fixed amount for the voyage regardless of how much cargo is loaded, within the vessel’s safe capacity. The charterer pays the same figure whether the ship is full or part-loaded, so the quantity risk sits with the charterer. Lump-sum is common where the parcel may flex (part-cargo, project moves, or cargoes that are hard to weigh precisely) and where the charterer would rather buy a known carriage cost than expose itself to a per-ton settlement. The two forms can be converted into each other for comparison by dividing the lump sum by the expected tonnage, which is how a desk checks that a lump-sum offer is competitive against the per-ton market.
How a freight rate is determined
A freight rate is not posted on a price list. It is negotiated for each fixture against the open market, usually through a broker who circulates the cargo order to owners with suitable open positions. The number that gets agreed is built from a small set of inputs.
The starting point is the owner’s voyage cost. The owner estimates fuel burn over the laden and ballast legs, port and canal charges at both ends, and the daily running cost of the ship across the total voyage time, then converts that estimate into a per-ton figure over the cargo quantity. This is exactly the calculation a voyage estimate performs, and it sets the floor below which the owner will not fix.
On top of that floor sits the market. The prevailing balance of vessel supply and cargo demand on the route, expressed through the spot benchmarks published by the Baltic Exchange, tells both sides what the cargo should clear at today. A tight market lets the owner price well above voyage cost. A soft market with surplus tonnage compresses the rate toward, or even below, the owner’s break-even, because an idle ship still burns running cost. The final fixed rate is where the owner’s floor and the market clearing level meet under negotiation.
For current spot levels do not rely on this page. Live route benchmarks are tracked on the Baltic indices page, a working estimate for a specific lane and parcel can be built with the rate calculator, and the market commentary in bulk shipping rates 2026 sets the directional context for the year.
The main drivers that move freight rates
The table below lists the factors that push a per-ton freight rate up or down. Each one feeds into either the owner’s voyage cost floor or the market clearing level above it.
| Driver | What it is | Effect on the per-ton rate |
|---|---|---|
| Vessel supply and demand | The balance of open ships against available cargo on the route | Tight tonnage lifts rates; surplus tonnage compresses them. The dominant driver. |
| Route and distance | Nautical miles laden plus the ballast leg to reach the load port | Longer voyages and long ballast legs raise the per-ton rate because the ship is committed for more days. |
| Bunker (fuel) cost | Price of marine fuel over the laden and ballast legs | Higher fuel prices raise the owner's voyage cost and push the rate up, often via a bunker adjustment. |
| Port and canal costs | Disbursements, dues and transit charges at load, discharge and any canal | Expensive ports or canal transits add to voyage cost and lift the rate. |
| Cargo type and stowage | Density, handling needs and stowage factor of the commodity | Light or awkward cargoes that leave the ship short of full deadweight raise the effective per-ton rate. |
| Parcel size | Tonnage of the stem relative to the vessel's capacity | A part-cargo spreads fixed voyage cost over fewer tons, raising the per-ton rate. |
| Seasonality | Recurring demand swings such as grain harvests and winter heating coal | Seasonal demand peaks tighten tonnage on affected lanes and raise rates. |
| Port congestion | Waiting time for a berth at load or discharge | Congestion ties up ships, removes tonnage from the market and pushes rates up. |
Two of these deserve a note. Vessel supply and demand is the single largest mover; everything else adjusts the number, but the supply balance sets its level. And the ballast leg, the unpaid voyage the owner sails to reach the load port, is invisible on the fixture but very real in the rate, because the owner has to recover those ballast days from the laden cargo.
How a per-ton rate becomes a voyage bill
The arithmetic of voyage freight is simple: agreed rate multiplied by cargo quantity. The worked example below shows how a single per-ton number translates into the gross freight the charterer pays, and how the owner’s voyage costs sit underneath it. The figures are illustrative and not a current market quote.
Panamax grain, US Gulf to Egypt (illustrative)
- Cargo
- 60,000 mt grain
- Lane
- US Gulf to Alexandria
- Freight rate
- USD 28.00 per metric ton
- Gross freight
- USD 1,680,000 (28.00 x 60,000)
- Freight basis
- Per ton on bill of lading quantity
- Costs inside the rate
- Owner pays fuel, port and canal
At a freight rate of USD 28.00 per ton on a 60,000 ton stem, the charterer’s gross freight is USD 1,680,000. That single figure is all the charterer owes for carriage; the owner pays the fuel, the port disbursements at both ends and any canal dues out of it.
If the shipper presents only 58,000 tons, the per-ton basis means the owner is paid on the lower bill-of-lading quantity, around USD 1,624,000, unless a minimum quantity or deadfreight clause has been agreed to protect the missing tonnage. This is exactly the quantity risk that a lump-sum freight would have shifted to the charterer.
To check whether USD 28.00 per ton is a fair rate, the owner runs a voyage estimate: total voyage cost divided by 60,000 tons gives the break-even rate, and the spread to USD 28.00 is the owner’s margin. The same calculation, run from the charterer’s side, confirms the rate is in line with the market on the rate calculator.
Freight rate vs charter rate
Freight rate and charter rate are often confused because both price the same ship. They are different instruments with different units and different risk allocations.
A freight rate prices one voyage. It is quoted in USD per ton of cargo, the owner runs the ship and pays the fuel and port costs, and the charterer’s only number is the freight. This is the voyage-charter world.
A charter rate, in the time-charter sense, prices the use of the whole ship for a period. It is quoted in USD per day of hire, the charterer takes commercial control and pays the fuel and port costs, and the owner is paid a daily rate whether the ship is loaded or empty. This page does not cover how time-charter hire works; the charter rates page is the place for that. The point to retain is that a per-ton freight rate and a per-day charter rate are two answers to the same question (what does it cost to use this ship), priced from opposite ends of the risk spectrum. Choosing between them is the core of a voyage charter versus time-charter decision, and a voyage estimate is how a desk compares the two on a like-for-like basis.