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Address Commission: What it is, How it Works

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澳洲幸运5官方开奖结果体彩网:Will Kenton
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Updated July 07, 2022
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Andy Smith
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Reviewed by Andy Smith
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Andy Smith is a Certified Financial Planner (CFP®), licensed realtor and educator with over 35 years of diverse financial management experience. He is an expert on personal finance, corporate financ💦e and real estate and has assisted thousands of clients in meeting their financial goals over his career.

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What Is an Address Commission?

An address commission is a fee paid by vessel owners to charterers. A charterer is a party who owns cargo and rents a vessel to deliver that cargo. The charterer employs a shipbroker who will find the proper ship to deliver the cargo.꧂ The shipowner pꦑays the shipbroker a commission for their services.

The shipowner pays the address commission to the charterer. The charterer uses this address commission to cover business costs. As a result, the fees incurred by the charterer are reduced by the amount of the address commওission.

Key Takeaways

  • An address commission is a fee paid by the owner of a vessel to the charterer who rents the vessel.
  • The fee offsets the costs to the charterer.
  • "Free of charter" refers to a shipment for which this fee is waived.

Understanding an Address Commission

The type of ship and charter used determine the total fees and address commissions incurr🤡ed by ship owners and charterers.

For example, a time charter enforces costs that are related to the employment duration of a vessel. A voyage charter's fees are dependent on the total weight of the cargo being transported.

"Free of address" refers to a shipment that does not require payment of the commission.

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