Minimum Quantity Commitment

What Is a Minimum Quantity Commitment (MQC)?

A minimum quantity commitment (MQC) is a contractual obligation where a shipper agrees to ship a minimum volume of cargo with a carrier over a set period, typically in exchange for a negotiated contract rate.

How Does a Minimum Quantity Commitment Work?

MQCs are common in ocean freight service contracts, where a shipper commits to moving a specified number of containers (or TEUs) annually on given trade lanes. In return, the carrier commits to providing space and honoring the contracted rate for that volume. If the shipper doesn't meet the committed volume, the contract may include penalties, rate adjustments, or loss of preferential treatment in future negotiations.

Why Minimum Quantity Commitments Matter

MQCs give carriers predictable demand to plan capacity around, and give shippers rate stability and priority booking, especially valuable during periods of tight vessel capacity. Shippers need to forecast volume carefully before committing, since falling significantly short of an MQC can carry real financial or relationship consequences.