Contract of Affreightment (COA)

A Contract of Affreightment (COA) is a multi-voyage shipping contract. The owner or carrier agrees to move an agreed volume of cargo, or to perform an agreed number of liftings, over a set period. No ship is named up front. The owner nominates a suitable vessel for each lifting. The charterer gets guaranteed liftings and a locked freight rate instead of returning to the spot market for every cargo.

A COA is not a single voyage charter and not a time charter. It sits between the two. It is the correct instrument when a trader, refiner, or terminal operator has a programme of repeated liftings but does not need to hire a named ship for a continuous period.

In one sentence

The owner sells transportation capacity. The charterer buys certainty of liftings and a fixed or formula freight. The performing vessel is nominated later, voyage by voyage.

Where a COA Fits Among Charter Types

Ametheus arranges voyage charters, time charters, bareboat charters, and contracts of affreightment. The four products solve different commercial problems.

Particular	Voyage Charter (VC)	Time Charter (TC / TCT)	Contract of Affreightment (COA)
What is hired	One named ship, one voyage	One named ship, for time	Transportation of a volume / number of liftings
Ship named at fixture	Yes	Yes	No. Nominated per lifting
Duration	Single voyage	Days, months or years	A defined programme period
Payment	Freight (WS or lumpsum)	Daily hire	Freight per cargo / per MT, often locked
Who pays bunkers & ports	Owner	Charterer	Owner (voyage economics apply to each lifting)
Commercial control	Owner operates the voyage	Charterer directs employment	Charterer calls liftings within the programme
Best used for	One-off cargoes, spot market	Continuous use of a ship	Repeated liftings, volume cover, coastal programmes

A bareboat charter is a further step: the charterer becomes disponent owner and takes crewing, maintenance and insurance. A COA never transfers that control. The owner remains the carrier on every lifting.

How a COA Is Structured

Most COAs are a two-layer contract.

Framework agreement. Period, total quantity or number of liftings, cargo description, load and discharge ranges, freight basis, nomination procedure, shortlift / overlift, cancellation, law and arbitration.
Individual voyage charter. Each lifting is performed under an underlying voyage form (for tankers typically ASBATANKVOY, SHELLVOY, BPVOY, INTERTANKVOY or a house form). Laycan, NOR, laytime, demurrage, pumping warranty and cargo handling sit here.

The framework governs the programme. The voyage form governs the ship once nominated. Where the two conflict, the framework usually prevails on programme matters (quantity, period, freight, nomination). The voyage form prevails on operational voyage matters, unless the parties state otherwise.

What the framework must lock

Identity of owner and charterer
Cargo type and specification (CPP / DPP / LPG / chemical; grade; density; temperature)
Total contractual quantity, or number of liftings, with tolerances
Contract period and how liftings are to be spread
Load port / range and discharge port / range, including any draft, LOA, beam or berth restrictions
Freight rate or freight formula, currency, and when freight is earned
Nomination and acceptance procedure for performing vessels
Shortlifting, overlifting and final shipment rules
Force majeure, sanctions, war, and cancellation
Law, jurisdiction or arbitration

Standard Forms

International dry-cargo and tanker COAs have recognised standard forms. They are starting points, not finished contracts. Ametheus amends them to the trade.

Form	Designed for	How we use it
INTERCOA 80	Tanker COA (oil products and bulk liquids). Issued with INTERTANKVOY 76 as the intended voyage form.	Primary international form for tanker volume contracts. Can be adapted to work with ASBATANKVOY, SHELLVOY or BPVOY as the underlying voyage charter. Contains an express safe-port wording that GENCOA does not.
GENCOA (2004)	Dry bulk COA. Replaced BIMCO VOLCOA. Used with GENCON, COAL-OREVOY, GRAINCON or another dry voyage form.	Correct form for grain, minerals, coal, fertilizers and other dry programmes. Not the first choice for tankers.
VOLCOA (1982)	Legacy BIMCO volume contract for dry bulk.	Superseded by GENCOA. Mentioned only where an existing programme still sits on the old form.
Bespoke COA	Any trade where the standard boxes do not fit the operation.	The right tool for a short coastal programme, anchorage-to-shore terminal work, draft-restricted ports, barge / coaster shuttle, or a mixed tanker-and-barge chain. Drafted around the actual berth, draft, tide window, STS or lightering step, and nomination clock.

INTERCOA 80 is a tanker contract of affreightment. It is an agreement to carry a stated quantity and type of goods between agreed ports over a given period. It is not limited to a particular ship. It operates as a series of voyage charter parties. GENCOA is the dry-cargo equivalent and should not be forced onto a tanker programme without heavy amendment.

Nomination of the Performing Vessel

Because no ship is named in the COA itself, nomination is the operational heart of the contract. A typical sequence:

Provisional notice. Charterer declares a spread of laydays for the next lifting, a set number of days before the opening date.
Definite notice. Charterer narrows the laycan inside that spread.
Owner nomination. Owner names a performing vessel or a substitute, with ETA, approximate cargo intake, and the usual tanker questionnaire (Q88 / VPQ), class, SIRE / CDI status, and last three cargoes where relevant.
Charterer accepts or rejects within a short stated window (often 24 hours, Sundays and holidays excepted). Silence is frequently deemed acceptance. Rejection must rest on the vessel description in the COA, not on preference.
Voyage fixture recap. The named ship, laycan, ports and voyage form are confirmed. That lifting then runs as a voyage charter under the framework.

The COA should state the minimum vessel description: DWT or intake band, draft, LOA, beam, year built, coating, heating, pumping rate, segregation, flag restrictions, oil-major acceptance, and any coastal or port limitation. Without that description, nomination disputes are inevitable.

Substitution

Owners almost always reserve the right to substitute a vessel of equivalent description. For a coastal or draft-restricted programme the substitution right must be tightly written. An Aframax nominated against a 7.5 m draft terminal is not an equivalent ship.

Quantity, Spread and Shortlifting

A COA can be written in two ways. Choose one and define the other as a consequence, not as a second obligation.

Quantity COA	Lifting COA
Owner must carry, and charterer must offer, a stated total quantity over the period (e.g. 240,000 MT CPP ±10% in owners’ option, in about 8–10 liftings).	Owner must perform, and charterer must stem, a stated number of voyages (e.g. 12 liftings of about 6,000–8,000 MT each, fairly evenly spread over 12 months).

Key quantity clauses that must be explicit:

“About”, percentage band, or owners’ / charterers’ option.
“Fairly evenly spread” is common and litigated. Better to state a maximum liftings-per-month and a minimum interval.
What the charterer pays if the programme quantity is not offered. Deadfreight, a liquidated shortfall freight, or a reduced final shipment are the usual tools.
Whether the owner must accept extra cargo, and at what freight.
Final shipment. How the last lifting closes the contractual quantity without forcing an uneconomic part-cargo.

Freight Under a COA

The commercial point of a COA is a locked freight for the programme. The lock can be written several ways.

Fixed lumpsum per lifting — clean for short coastal shuttles with a stable intake.
Fixed USD per metric tonne — standard for product programmes with varying intake.
Worldscale percentage — used on longer dirty and clean tanker trades; the COA locks the WS points, not the flat rate.
Formula freight — base rate plus a bunker adjustment factor (BAF), or a published index collar. Useful where the programme runs beyond 6–12 months.

Freight is earned lifting by lifting, under the voyage form, unless the framework says otherwise. The COA should state whether freight is prepaid, BBB, payable on completion of discharge, or on a stated credit period, and whether commission is address or brokerage.

COA payment terms

Payment term	Code	Description on a COA programme
Freight prepaid per lifting	FPP	Freight for that voyage paid before loading. Strongest owner protection on a multi-lifting programme.
Before Breaking Bulk	BBB	Freight paid before discharge starts. Common owner position on tanker COAs.
Freight payable on discharge	FPD	Due after completion of discharge of that lifting.
Net days after discharge	NET-15 / 30 / 60	Credit period per lifting. Only acceptable with a tested counterparty or security.
Letter of credit per lifting or revolving LC	SLC / RLC	Sight or usance LC covering each voyage, or one revolving LC for the programme quantity.
Bunker adjustment	BAF	Freight adjusted against an agreed bunker index and a stated consumption. Protects both sides on a long COA.

Best for owners on a COA: BBB or FPP per lifting, with a shortfall / deadfreight clause if the programme is not stemmed.

Best for charterers: FPD or NET-15/30 per lifting, with a locked rate and a right to reject off-spec tonnage at nomination.

When a COA Is the Right Tool

Use a COA when the cargo programme is real, but the ship does not need to be named for the whole period.

Typical tanker uses

A refiner or trader moving a monthly CPP or DPP stem on a fixed corridor
An LPG or chemical shipper with 6–18 months of repeating parcels
A crude programme that is too thin for a time charter but too regular for the spot market
A term sale (FOB or CIF) that must be backed by dedicated liftings without putting a ship on hire

Coastal and draft-restricted programmes

A bespoke COA is the right tool for a short coastal programme — for example anchorage to shore terminal — where draft is limited. Standard INTERCOA 80 and GENCOA boxes assume ocean tankers and named port ranges. They do not, by themselves, solve:

Maximum arrival draft and tide windows
LOA / beam / UKC limits at a river berth or jetty
Anchorage lightering or STS into a daughter vessel or barge
Coaster or tank-barge shuttle from roads to a shallow terminal
Night navigation, pilotage, or daylight-only berthing
A mixed chain: mother tanker at anchorage + nominated barge to the berth

In that trade the COA should describe the performing unit as a class of vessel (DWT band, draft, pumping, heating, flag, manning) rather than a named ship, and should attach the terminal questionnaire, draft table and any STS protocol as contract documents. Freight is usually a lumpsum per lifting or a USD/MT rate that already assumes the extra time at anchorage.

When not to use a COA

A single cargo — fix a voyage charter.
The charterer needs the ship on demand for any employment inside trading limits — fix a time charter or TCT.
The charterer wants to man and insure the ship — that is a bareboat.
The volume is speculative. A COA with no realistic stems becomes a dispute about shortlifting.

Risk Allocation — What Each Side Is Buying

Charterer obtains

Owner obtains

• Guaranteed liftings across the period

• A locked freight, off the spot market

• No daily hire, no bunker exposure

• No obligation to employ a named ship between cargoes

• The right to reject a vessel that fails the agreed description

• A booked programme of employment

• Freight visibility for the period

• Freedom to position and substitute suitable tonnage

• Voyage economics remain with the owner

• A shortfall remedy if cargo is not offered

The owner keeps technical operation, crew, insurance and voyage costs on each lifting. The charterer keeps cargo readiness, port nomination inside the agreed ranges, and the obligation to offer the contractual quantity on the agreed spread. Demurrage, despatch, pumping and cargo-hose terms follow the underlying voyage charter.

Worked Example — Coastal Draft-Restricted COA

A product importer needs 8,000–10,000 MT of gasoil each month for twelve months, discharged at a shore terminal whose maximum arrival draft is 7.2 m. Ocean MR tonnage cannot berth. The workable chain is: mother vessel at the roads or a nearby anchorage, then a nominated coaster or tank barge into the jetty.

A voyage charter each month would re-open freight, vessel quality and lightering terms twelve times. A time charter would put the importer on hire and bunker risk for a ship that sits idle between stems. A COA is the correct structure:

Period: 12 months from first lifting.
Quantity: 12 liftings of 8,000–10,000 MT gasoil, fairly evenly spread, minimum 20 days between laycans.
Performing unit: tank barge / coaster, max arrival draft 7.2 m even keel, coated tanks, last three cargoes clean, heating if required.
Load: nominated ocean tanker at named anchorage / STS area, or a coastal load port if a direct stem is available.
Discharge: named shore terminal. Terminal regulations and draft table attached.
Freight: lumpsum per lifting, BBB, bunker adjustment only if IFO/MGO moves more than an agreed collar.
Form: bespoke COA framework + voyage terms adapted from a tanker voyage form for the sea-leg and a barge contract for the shuttle, or a single combined form covering both legs.

That is the programme the standard ocean forms were not written to serve. The bespoke COA is.

Documents and Fixture Path

Ametheus treats a COA as a programme fixture, not a one-line recap.

Preliminary information sheet — cargo, monthly volume, ports or anchorage, draft limits, period, and whether the requirement is a quantity COA or a lifting COA.
KYC and NCNDA — charterer, disponent owner and, where relevant, the receiving terminal.
Framework recap — period, quantity, freight, nomination clock, vessel description, shortlift, law.
Charter party package — INTERCOA 80 or bespoke framework, plus the agreed voyage form for each lifting.
Per-lifting nomination pack — Q88 / VPQ, class, SIRE or CDI, last cargoes, ETA, intake, and acceptance.
Post-fixture — NOR, SOF, pumping log, freight invoice, demurrage file, and programme quantity tracker until the COA is closed.

How Ametheus Works a COA

We combine market screening with contract drafting. A COA that is commercially right and legally loose is not a fixture. A COA that is legally tight and operationally unworkable at the berth is not a fixture either.

We take the programme first: volume, corridor, draft, terminal rules, and whether the client is covering a term sale or a captive plant.
We advise whether the requirement is a voyage series, a TCT, a period time charter, or a COA. We do not force a COA onto a one-off cargo.
On tanker programmes we start from INTERCOA 80 or a house framework and attach ASBATANKVOY, SHELLVOY or BPVOY as the voyage form, amended for the trade.
On coastal, anchorage and draft-restricted work we draft a bespoke COA around the terminal, the lightering step and the performing-unit description.
On dry programmes we use GENCOA with the correct voyage form.
We run nomination, acceptance and post-fixture follow-up lifting by lifting until the contractual quantity is completed.

Ready to Cover a Programme?

For a tanker or coastal COA recap, send the cargo, monthly volume, load and discharge (or anchorage and terminal), draft limit, period, and preferred freight basis.

Email: [email protected] · CC sales and the chartering desk as published on the Tanker Chartering page.

Preferred communication timings (Indian Standard Time):

Calls: 09:00–19:00. No calls after 19:00.
WhatsApp: texts until 22:00.
Emails: any time. We reply in working hours.

Related Ametheus Pages (internal links to insert)

Tanker Chartering — /tanker-chartering/
Types of Charter Party Agreements — /types-of-charter-party-agreements/
Guide to Charter Party Forms — /guide-to-charter-party-forms/
Time Charter Period & TCT — /time-charter-period-time-charter-trip-tct/
Preliminary Information Sheet — /preliminary-information-sheet-chartering-01/
Dry Bulk Vessel Chartering — /dry-bulk-vessel-chartering/
Ship-to-Ship (STS) Compliance — /ship-to-ship-sts-compliance/

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Suggested parent: Chartering / Knowledge Base – Chartering. Also insert a short COA subsection under “Types of Charter Agreements” on /tanker-chartering/ with a “Read the full COA note” link.