Freight Differential Clause Samples
The Freight Differential clause defines the method for calculating and allocating the difference in freight costs between two shipping options, routes, or carriers. In practice, this clause is often used when a charterer or shipper has the right to substitute a vessel or change the shipping route, and the resulting cost difference—whether higher or lower—is settled between the parties. Its core function is to ensure that any additional costs or savings arising from such changes are fairly distributed, thereby preventing disputes and maintaining financial clarity in shipping contracts.
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Freight Differential. Any amount resulting from the difference with respect to each Parcel by which the freight cost for shipment of that Parcel from Port of Loading to the Discharge Port varies from the freight cost which Seller would have incurred if that Parcel were instead being shipped by Seller from the Port of Loading to *[Redacted]* (the “Freight Differential”) shall be for Buyer’s account. The Freight Differential shall be determined by Seller on the basis of the actual freight rates specified in Seller’s Contracts of Affreightment or Charter Parties in force at the time of shipment of such Parcel for shipments between the Port of Loading and the Discharge Port as compared to shipments between the Port of Loading and *[Redacted]*, respectively, provided that if Seller does not have a Contract of Affreightment or Charter Party to any *[Redacted]*, the freight rates from Port of Loading to *[Redacted]* quoted in the market for deliveries of similar sized parcels from the Port of Loading to *[Redacted]* shall be used. Seller shall reflect the Freight Differential, if any, applicable with respect to a particular Parcel in the invoices relating to that Parcel rendered pursuant to Article 8.