FREIGHT AND "COA"

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1) FREIGHT:-
           It is the remuneration payable by the charterers to the owners for the performance of the contract. It is normally payable in accordance with the terms of a freight clause which stipulates the amount of freight, the time of payment and the method of payment.It is often paid under charter party terms partially in advance.
  • It is not payable unless the entire cargo reaches the agreed destination, even not the carriers fault.
  • It is not payable where the owners have breached the contract.
2) CONTRACT OF AFFREIGHTMENT:- 
       It is essentially a contract to satisfy a long term need for transport, most often for iron ore and coal in bulk. It is an agreement between a charterer and ship owner for the carriage of a specified quantity of specified goods between specified places, over a specified( and usually long) period of time by vessels of a type and size stipulated by a charterer but which are nominated by the owners. The goods to carried and the total period are clearly defined, but the shipment dates may be approximate. A stated minimum quantity must usually be loaded each voyage with a "more or less" margin at the option of either the charterer ( MOLCO) or the owners ( MOLOO).
In summary:
  • The owners agree to transport an agreed volume of cargo over specified period.
  • The charterer nominates cargoes and loading dates.
  • The owners nominate suitable vessels.

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