Contract of Affreightment (COA)
A Contract of Affreightment (COA) is a chartering agreement in which a shipowner undertakes to carry a specified quantity of cargo over a series of voyages within a defined period, rather than committing a single named ship to a single voyage. The owner is free to nominate which vessels perform the shipments, giving flexibility to schedule the cargo across a fleet.
COAs suit cargo owners with large, regular volumes to move (such as coal, ore or grain shippers) who want assured coverage and price stability without operating ships, and owners who want to secure a base of employment for their fleet. The contract fixes the total quantity, the shipment programme, and the freight rate (per tonne), while leaving vessel nomination to the owner. It sits alongside the voyage charter, time charter and bareboat charter as a distinct form of chartering, and is a key instrument for covering ongoing bulk trades efficiently.
A steel mill or utility needs a steady stream of ore or coal shipments, not one ship for one voyage — the COA covers exactly that, guaranteeing volume and price over time while letting the owner deploy whichever vessels fit. It is how ongoing bulk trades are secured efficiently, a distinct and important tool alongside the standard charter types.
How is a COA different from a voyage charter?
A voyage charter is for one voyage on a named ship; a COA covers a quantity of cargo over multiple voyages, with the owner free to nominate the vessels.
Who uses contracts of affreightment?
Cargo owners with large, regular volumes (coal, ore, grain) wanting assured coverage and price stability without operating ships.