Contract of affreightment

A COA commits a carrier to lift a stated quantity of cargo over a period in agreed shipments, rather than fixing one named ship to one voyage. The owner nominates tonnage against each parcel as the cargo is called forward, which gives the cargo owner volume certainty and the shipowner a baseload of employment. A pay-or-play or deadfreight clause protects the owner if the charterer fails to declare the agreed quantity. COAs are common in long-term iron ore, coal, and oil-products programs.