Contract of Affreightment


Also found in: Dictionary, Legal, Financial.

Contract of Affreightment

 

in international commercial navigation, a contract by which maritime cargoes are transported.

The contract of affreightment may include one or both of two documents: a charter party and a bill of lading. It places an entire ship, part of a ship, or a specified place on a ship at the disposal of the shipper. Standardized forms, such as the Jenkon or Soviet-wood charters, are used for different types of cargoes and routes; the signatory parties may introduce qualifications and additions by mutual consent. A charter party must name the parties to the contract and specify the freight charge, the vessel and its cargo, the port of loading, and the port of destination or the ship’s route. A widely used charter party is the voyage charter, by which a ship is chartered for one or more voyages.

The charter party governs the relation between the shipper and the carrier and is signed by them or their agents. The charter party is often accompanied by a bill of lading, which must contain a clause stating that it has been issued on the basis of the charter party and that the conditions stated in the charter party hold good for tne bill of lading.

The demise charter is not considered a contract of affreightment but a type of property lease contract (seeLEASE OF PROPERTY). In a demise charter, by which a ship is hired for a definite period, the shipowner, for a consideration (rent), places the capacity of the ship at the disposal of the charterer (lessee) for the transport of cargoes or passengers or for other purposes, such as towing or fishing. Standardization forms are used for the demise charter, as in contracts of affreightment.

Mentioned in ?
References in periodicals archive ?
Likewise if, under an FOB contract, the importer fails to conclude a contract of affreightment with a shipping company well before the expected date of receipt of the shipping advice, the shipment of the goods will be delayed.
These increases in revenues and average dayrates are primarily related to a change in contract mix to time charters from a significant contract of affreightment that expired at the end of March 2006 and a full-quarter contribution from the Energy 8701, a previously retired single-hulled tank barge that was placed back into service in early October 2006.
The results for the Contract of Affreightment segment were lower compared to the prior-year period, primarily as a result of a scheduled reduction in the contracted freight rates.
The Contract of Affreightment segment had improved results compared to the prior year period primarily as a result of more cargo moved during the quarter.
The Contract of Affreightment segment had improved results compared to the same prior year period as a result of lower vessel operating costs.
In a separate agreement but coincidental with the sale of the vessels, the Company secured carriage for limestone from its quarries through a favorable long-term contract of affreightment with Lower Lakes Transportation Company.
Through its subsidiaries, the Company operates a fleet of ten self-unloading bulk carriers, including eight River Class vessels and one River Class integrated tug/barge unit, and three conventional bulk carriers, of which one is operated under a contract of affreightment.
An example of this success is the contract of affreightment (COA) agreement we signed with Shell International Trading and Shipping Company.
General Maritime Corporation today announced that it has entered into a contract of affreightment (COA) agreement with Shell International Trading and Shipping Company Limited (STASCO), the principal trading and shipping business of the Royal Dutch/Shell Group.