COA
A Contract of Affreightment (COA) is a long-term contract between a shipowner and a charterer committing the owner to carry a series of cargoes — typically a defined annual or multi-year volume — over a specified period. Unlike a voyage charter (which is for a single voyage) or time charter (which hires a specific vessel for a period), the COA commits to volume without specifying particular vessels.
COAs are common in commodity trades (oil, grain, ores, cement) where buyers and sellers have steady requirements. The owner has flexibility to deploy different vessels for each shipment, optimising fleet utilisation. Hire is typically paid per voyage at agreed rates with volume commitments and demurrage/despatch terms.
A COA is a volume commitment, not a ship commitment — the owner agrees to carry a series of cargoes over a period and nominates whichever suitable vessel fits each one. It gives the charterer guaranteed capacity and the owner steady employment with the freedom to optimise the fleet across shipments.
e.g. 12 cargoes/year
any suitable vessel
over the period
What is the difference between a COA and a voyage charter?
A voyage charter covers one voyage on a named vessel; a COA commits the owner to carry a series of cargoes over a period, free to nominate different vessels for each shipment.
What is a COA used for?
Steady commodity trades — oil, grain, ores, cement — where a shipper needs guaranteed capacity for a recurring volume over months or years.