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Liner freight rebate systems or Loyalty arrangements are the means that have been devised to secure the continued and exclusive patronage of shipper to the conference lines. The purpose is to eliminate competition.
The rebate systems in operation are
Deferred rebate: The rebate is calculated on the freight cost during a designated period called the shipment period of usually 3 to 6 months, but is paid after the same period of time (deferred period) following the shipment period on the condition that the shipper will continue to use the conference line for all his shipments during the shipment period and deferred period.
Dual rate system: If the shippers sign a contract with conference for exclusive patronage, they get the benefit of rates which are lower than the rates applicable to non-contract shippers.
Immediate rebate system: Under this system the contract shippers are given immediate rebate on the freight on shipment of their cargoes. So shippers get their money rebate without any deferment.
Freight rebate
A refund of a portion of previously paid transportation charges, usually in return for the shipper´s tendering a certain volume of freight to the carrier. This practice is illegal in some countries, such as US. This can have the unintended consequence of making legitimate claims against carriers difficult, since they must be fully documented to prove that they are not actually rebates in disguise.
