Quarterly Freight Agreement (QFA)
A Quarterly Freight Agreement (QFA) is a short-term contract between a shipper and a carrier that locks in freight rates for three months. It provides price stability in markets where rates can change frequently. By fixing rates for a quarter, both parties reduce uncertainty. This makes short-term planning more reliable.
Under a QFA, the agreed rates usually apply to specific trade lanes, cargo types, and volumes. The contract outlines terms such as validity dates, surcharges, and service conditions. This clarity helps avoid frequent renegotiations. It also keeps costs predictable during the quarter.
Shippers often choose QFAs when they want flexibility without committing to long-term contracts. Carriers benefit by securing volume for a defined period. The arrangement balances stability with adaptability. It works well in volatile freight markets.
Overall, a QFA supports better budgeting and smoother operations over a three-month cycle. It aligns expectations on pricing and service levels. It reduces exposure to sudden rate spikes. And it helps both sides manage short-term freight strategies effectively.
Frequently Asked Questions about Quarterly Freight Agreement (QFA)
Clear answers to the most common questions people have when learning about Quarterly Freight Agreement (QFA).
A QFA offers rate stability while keeping flexibility, making it ideal when market conditions are uncertain or volumes may change.
Base rates are fixed for the quarter, but agreed surcharges or exceptional costs may still apply as per the contract terms.
The agreement ends after three months, and both parties can renegotiate rates, renew the QFA, or switch to a different contract structure.