Exclusive Patronage Agreements

Posted in Operations and Supply Chain Terms, Total Reads: 771

Definition: Exclusive Patronage Agreements

Under Exclusive Patronage Agreements, a shipper agrees to use only member liner firms of a carrier in return for a 10-15% reduction in rate. A firm which pledges to ship its goods aboard conference vessels is called as a Contract Shipper. Exclusive Patronage Agreements are most commonly used in the steamship industry.

Similarly, firms which do not sign such Exclusive Patronage Agreements are called as Non Contract Shippers and they receive a higher non-contract rate. A contract shipper who violates the terms of the Patronage Agreements by shipping goods aboard non-conference vessels is subject to economic penalties which are enforced.

Exclusive Patronage Agreements are authorized by the Shipping Act of 1916.

Exclusive Patronage Agreements are similar to loyalty agreements. However, loyalty agreements do not have the 100% loyalty clause unlike Exclusive Patronage Agreements. Still, the two terms are used virtually synonymously since loyalty agreements in the United States of America do not provide a commitment of anything less than 100% of the cargo from a merchant.


Hence, this concludes the definition of Exclusive Patronage Agreements along with its overview.


Browse the definition and meaning of more terms similar to Exclusive Patronage Agreements. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary

Share this Page on: