CHARTERING

Types of Contract of Affreightment

The Contract of Affreightment

In some cases the ship owner will prefer to fix a contract of affreightment on the basis of a fixed price per ton transported cargo without binding himself contractually to have to deliver a named ship. A ship owner who operates an entire fleet, generally prefers to be able to transfer the goods which he must carry, from one ship to another to be able to realize the most profitable operation prospects of his ships against the lowest possible freight rates. On the other hand, a shipper that has to make regular shipments - e.g. ten consignments of 50,000 tons of coal from Colombia to Rotterdam with two-monthly intervals - prefers to arrange all those shipments in a single contract where the specifications of each trip is left at the discretion of the ship owner.

In that case, between the ship owner and the shipper, a contract or affreightment will be concluded whereby the shipper doesn’t have to worry about the transport of his goods, while the ship owner can use his ships with a maximum of flexibility. Under the terms of a contract of affreightment (or a chartering agreement) the ship owner commits himself to transport the goods against a set price per ton without having to mention which ship he will use. (Stopford, M., Maritime Economics, London, Unwin Hyman, 1988, 24.)

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