Contract of Affreightment
A Contract of Affreightment (COA) is a pivotal legal agreement forged between a shipper and a carrier in the shipping industry. This long-term contract stipulates the transportation of a specific amount of cargo over a set period. Key details such as cargo type and quantity, loading and unloading ports, shipment frequency, and freight rates are clearly outlined. COAs are particularly prevalent in the bulk cargo sector, facilitating the movement of commodities like oil, grain, or coal.
— sennder Team
Example or usage in road freight logistics:
Imagine a global steel manufacturer signing a COA with a maritime carrier for the transportation of iron ore. The contract details the amount of ore to be shipped, the frequency of voyages, and the ports involved. This agreement enables the manufacturer to ensure a steady flow of raw materials at predictable costs. Simultaneously, the carrier secures a stable, long-term business commitment. Such arrangements illustrate the COA's role in fostering reliable and efficient logistics operations in the bulk shipping industry.