What is a Contract of Affreightment (COA)?

• A. A shipping agreement between a shipowner and charterer where the owner agrees to transport a specific quantity of cargo over a set time
• B. A contract to lease a vessel for a single voyage
• C. A contract for insurance of cargo
• D. A contract for sale of goods by sea

Answer: (A)

A Contract of Affreightment is a long-term shipping agreement in which the shipowner commits to transporting a defined quantity of cargo over a set period. Instead of hiring the vessel for a single voyage, the owner provides capacity to move the agreed tonnage across multiple trips (or flexibly as cargo flows demand) within the contract term, often with specified ports, laydays, and redelivery terms. This arrangement gives the charterer predictable access to vessel capacity for varying volumes and provides the owner with steady demand. It is not an insurance contract, nor a sale of goods, and it is not limited to a single voyage.