7. Freight and Demurrage.—
Freight is the price of transportation by sea and demurrage has been called a kind of extended freight but is more generally understood as the price of delay in loading or receiving the cargo on the part of the shipper or consignee. Freight must be earned by conveyance and delivery of the cargo but the ship is entitled to hold the goods until payment is made. The contract of affreightment is very succinctly described by Lord Ellenborough, in Hunter v. Prinsep, 10 East 378:
The shipowners undertake that they will carry the goods to the place of destination, unless prevented by the dangers of the seas, or other unavoidable casualties; and the freighter undertakes that if the goods be delivered at the place of their destination he will pay the stipulated freight; but it was only in that event, viz., of their delivery at the place of destination, that he, the freighter, engages to pay anything. If the ship be disabled from completing her voyage, the shipowner may still entitle himself to the whole freight, by forwarding the goods by some other means to the place of destination; but he has no right to any freight if they be not so forwarded; unless the forwarding them be dispensed with, or unless there be some new bargain upon this subject. If the shipowner will not forward them, the freighter is entitled to them without paying anything. One party, therefore, if he forward them, or be prevented or discharged from doing so, is entitled to his whole freight; and the other, if there be a refusal to forward them, is entitled to have them without paying any freight at all. The general property in the goods is in the freighter; the shipowner has no right to withhold the possession from him, unless he has either earned his freight, or is going to earn it. If no freight be earned and he decline proceeding to earn any, the freighter has a right to the possession.
Where a ship does not "break ground," that is to say, does not commence her voyage at all, as in the case of the Tornado, 108 U. S. 342, in which it appeared that the vessel was destroyed by fire before sailing, the contract of affreightment is dissolved, or does not become effective, and the shipper cannot recover freight which she did not even begin to earn.
The lien for freight is a qualified one and will be lost by an unconditional delivery. The same is true of demurrage but the personal liability of the shipper or consignee will, of course, remain. The amount of freight is usually fixed by agreement and specified in the bill of lading.
So, also, are clauses in regard to demurrage. Strictly speaking, the latter can only be recovered where it is expressly reserved in the contract of carriage, but, where such stipulations have been omitted, the same result is sometimes obtained by an action for damages in the nature of demurrage on account of wrongful detention of the ship. The question of whether the ship has been unreasonably delayed or wrongfully detained is often a very confused one and its solution depends to a great extent on the surrounding circumstances. When emergency demands prevail and ports are crowded, the ship assumes some of the incidental risks of delay in obtaining and discharging her cargo, and, unless the contract is plain, can hardly insist upon more than the same treatment as others in similar situations are obtaining. When disputes arise, neither party should press his position to the extent of causing further delay, as by withholding or refusing the goods. Admiralty practice abounds in opportunities to prevent unnecessary delay by bonds or stipulations and the parties should take advantage of these or risk the disfavor of the court in which their litigation proceeds.