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A Contract of Affreightment (COA) is a legal agreement between a shipowner and a charterer in which the shipowner agrees to transport a specified quantity of cargo over a defined period, typically across multiple shipments.
In logistics and 3PL operations, a COA ensures that businesses have consistent shipping capacity without requiring a dedicated vessel for each load. This agreement is particularly useful for transporting large volumes of goods, as it allows flexibility in scheduling shipments while optimizing costs. For 3PL providers, COAs enhance their service offerings by ensuring efficient and reliable transportation solutions for clients.
In logistics and 3PL, a COA acts as a strategic shipping partnership, ensuring dependable freight capacity for your cargo. It reduces the stress of finding space for each shipment and eliminates the risks of fluctuating rates in the spot market.
By streamlining bulk transportation, COAs provide cost predictability and efficiency, allowing your business to focus on growth while the logistics run smoothly.
Buske Logistics is a Top 40 3PL with over 35 warehouses across North America, specializing in warehousing, transportation, and value-added services. We provide tailored logistics solutions serving major Fortune 500 companies.
A COA is essential for logistics and 3PL providers as it guarantees consistent freight capacity, enabling seamless transportation planning for high-volume clients. For businesses, it minimizes supply chain disruptions by providing reliability in shipping schedules and costs, which is crucial for maintaining operations and meeting customer demands.
This arrangement also allows 3PL providers to strengthen their relationships with clients by offering tailored shipping solutions that ensure efficiency and cost savings. For example, a 3PL company managing the distribution of steel for a manufacturer might secure a COA to transport 1,000 tonnes of steel monthly over a year. This agreement ensures that the client’s production and distribution timelines are maintained without the risk of shipping delays or fluctuating freight costs.
