Legal Definitions - charter of affreightment

A charter of affreightment is a legal contract in maritime law where a shipowner agrees to transport goods for a charterer (the party hiring the service) using a specific vessel or a portion of its cargo capacity. Unlike a bareboat charter, where the entire ship is leased and operated by the charterer, a charter of affreightment focuses solely on the transportation of cargo. The shipowner retains control over the vessel's operation, crew, and navigation, while the charterer pays for the space and service of carrying their goods.

Here are some examples illustrating a charter of affreightment:

• Example 1: International Grain Shipment

  A large agricultural corporation in the United States needs to transport 50,000 tons of wheat from a port in Louisiana to a buyer in Egypt. Instead of buying or leasing an entire ship, the corporation enters into a charter of affreightment with a shipping company. Under this agreement, the shipping company commits a specific bulk carrier to load and transport the wheat for the agreed-upon price and route. The shipping company remains responsible for the ship's crew, fuel, and navigation, while the agricultural corporation's obligation is to provide the cargo and pay the freight.

  This illustrates a charter of affreightment because the contract is specifically for the transport of a defined quantity of goods (wheat) from one port to another, with the shipowner retaining operational control of the vessel.

• Example 2: Specialized Equipment Transport

  An energy company has purchased several massive wind turbine blades and tower sections from a manufacturer in Germany and needs them delivered to a new wind farm construction site in Brazil. Due to the oversized nature of the cargo, standard container shipping is not feasible. The energy company signs a charter of affreightment with a heavy-lift shipping specialist. The specialist agrees to dedicate a vessel with appropriate lifting gear and deck space to carry these specific components on a single voyage. The energy company pays for this specialized transport service, but the shipping specialist's crew operates the vessel and manages the complex loading and unloading procedures.

  This demonstrates a charter of affreightment as it involves a contract for the specialized transport of specific cargo (wind turbine components) on a vessel operated by the shipowner, rather than the energy company leasing and operating the entire ship itself.

• Example 3: Seasonal Fruit Export

  A cooperative of fruit growers in Chile needs to export large volumes of fresh grapes to markets in Europe during their harvest season. To ensure timely delivery and maintain quality, they enter into a series of charters of affreightment with a refrigerated cargo shipping line. Each contract specifies the quantity of refrigerated container space required for a particular shipment of grapes on a designated vessel sailing on a scheduled route. The shipping line provides the refrigerated containers, loads them onto their ships, and manages the cold chain during transit, while the cooperative pays for the space and service for each shipment.

  This is an example of a charter of affreightment because the agreement is for the provision of cargo space and transport services for perishable goods, with the shipping line maintaining full operational control of its refrigerated vessels and crew.