Chartering Guide: 2026
COA vs Time Charter
vs Voyage Charter
The three main vessel charter contracts explained: differences, advantages, pricing, and when to use each for Nigerian and West African trade.
Quick Answer
A Contract of Affreightment (COA) locks in rates for multiple voyages over 1-5 years. A Time Charter hires a vessel for a period with daily rates. A Voyage Charter covers a single port-to-port movement. Most Nigerian crude exports use voyage charters; Dangote Refinery and major traders use COAs; offshore support vessels use time charters.
Author: Pius Nobei, MBA, CEO, Calmwaters Shipping Ltd. 15+ years chartering vessels in Nigerian and West African waters. Last updated: September 2026.
Side-by-Side Comparison
| Aspect | COA | Time Charter | Voyage Charter |
|---|---|---|---|
| Duration | 1-5 years (multiple voyages) | Weeks to years | Single voyage |
| Vessel | Specific or owner's choice | Named vessel | Named vessel |
| Rate Structure | Per-tonne or per-voyage rate | Daily hire rate | Lumpsum or freight rate |
| Cargo Control | Charterer nominates cargo | Charterer controls all cargo | Charterer controls cargo |
| Route Control | Pre-agreed routes/ports | Charterer decides | Agreed in charter party |
| Operational Costs | Owner pays voyage costs | Charterer pays bunkers/port | Owner pays all costs |
| Risk Allocation | Shared (rate certainty) | Charterer bears commercial risk | Owner bears voyage risk |
| Laytime/Demurrage | Per-voyage terms | N/A (hire continues) | Agreed terms |
| Best For | Regular volume shippers | Flexible operators | Spot cargo |
| BIMCO Form | COA Standard / GENCON | SHELLTIME 4 / SUPPLYTIME | GENCON 94 / ASBATANKVOY |
What is a Contract of Affreightment (COA)?
A Contract of Affreightment is a long-term agreement between a shipowner and charterer where the owner commits to carrying a specified total quantity of cargo over multiple voyages at an agreed rate. Unlike a voyage charter (single trip), a COA covers a series of voyages, typically over 1-3 years, sometimes up to 5 years.
The key advantage is rate certainty. In volatile markets like West African crude exports, locking in rates protects both parties from freight market swings. The charterer knows their shipping cost per tonne; the owner knows their revenue per voyage.
West Africa context: Nigerian crude oil exports to Europe, Asia, and the Americas frequently use COAs. Dangote Refinery's crude imports (700,000 bpd capacity) are partially covered by COA arrangements. Major trading houses, Trafigura, Vitol, Gunvor, use COAs for recurring Nigerian liftings.
What is a Time Charter?
A Time Charter hires a vessel for a defined period, from a few weeks to several years. The charterer pays a daily hire rate and controls commercial operations (cargo, routes, scheduling). The owner remains responsible for crew, maintenance, and insurance.
Time charters are the standard for offshore support vessels in Nigerian waters. PSVs and AHTS operating in the Bonga, Agbami, and Egina fields are typically under SUPPLYTIME 2005 time charter agreements, with daily hire rates ranging from $8,000-$45,000 depending on vessel class.
For tankers, SHELLTIME 4 is the dominant time charter form. Time charter rates for MR product tankers in West Africa range from $12,000-$20,000/day in 2026, depending on market conditions and vessel age.
What is a Voyage Charter?
A Voyage Charter is the simplest form, a single port-to-port movement. The owner provides the vessel, crew, and pays all voyage costs (bunkers, port charges, crew wages). The charterer pays a lumpsum or freight rate per tonne of cargo loaded.
Voyage charters dominate Nigerian crude oil exports. NNPC tenders for crude liftings are voyage fixtures. GENCON 94 is the standard voyage charter party form, with ASBATANKVOY commonly used for tanker voyages.
The key commercial terms in voyage charters are laytime (allowed loading/discharging time) and demurrage (daily penalty for exceeding laytime). At Nigerian ports, demurrage rates typically range from $15,000-$35,000/day for tankers, reflecting port congestion costs.
Decision Framework: Which Charter Type to Use
Choose COA if:
- You have recurring cargo (multiple liftings per year)
- You want rate certainty in volatile markets
- You can commit to minimum volumes over 1-3 years
- You're a refiner, oil marketer, or trading house with regular requirements
Choose Time Charter if:
- You need a vessel for an extended but undefined period
- You want control over cargo and routing decisions
- You have variable cargo flows (offshore support, product trading)
- You're operating in a specific field or trade lane
Choose Voyage Charter if:
- You have a single cargo to move port-to-port
- You want all-in pricing (no operational cost management)
- You're responding to a tender or spot opportunity
- You don't need the vessel for more than one lifting
Pricing Structures Compared
Each charter type uses different pricing mechanisms:
- COA: Rate per tonne of cargo (e.g., $8/tonne Lagos to Rotterdam) or flat rate per voyage. Rates are fixed for the contract duration, sometimes with market adjustment clauses.
- Time Charter: Daily hire rate (e.g., $15,000/day for MR tanker). Charterer also pays bunkers, port charges, and insurance. Total cost = hire + operational expenses.
- Voyage Charter: Lumpsum (fixed total) or freight rate per tonne. Owner pays all voyage costs. Charterer's only additional cost is potential demurrage if loading/discharging exceeds laytime.
BIMCO Standard Forms
BIMCO (Baltic and International Maritime Council) provides standard charter party forms used globally, including in Nigerian waters:
- GENCON 94, Standard voyage charter party. Used for dry cargo and general tanker voyages.
- ASBATANKVOY, Tanker voyage charter. Standard for crude oil and petroleum product shipments.
- SHELLTIME 4, Time charter for tankers. Widely used for product tanker time charters in West Africa.
- SUPPLYTIME 2005, Time charter for offshore support vessels (PSV, AHTS). Standard in Nigerian offshore operations.
- BIMCO COA Standard, Purpose-built for Contract of Affreightment arrangements.
Chartering Advice
Need Help Choosing the Right Charter Type?
Calmwaters provides expert chartering advice for Nigerian and West African waters. We match your cargo requirements to the optimal charter structure.