DEFINITION of 'Address Commission'
The fee paid by vessel owners to charterers, the party who owns cargo and employs a shipbroker who will find a proper ship to deliver the cargo. As a result, the total fees incurred by the charterer are reduced by the amount of the address commission.
"Free of address," refers to a charter which is not paid the address commission.
BREAKING DOWN 'Address Commission'
The type of ship and charter used determines the total fees and address commissions incurred by ship-owners and the charterers. For example, a time charter enforces costs that are related to the employment duration of a vessel, while a voyage charter's fees are dependent on the total weight of the cargo being transported.