Minimum Quantity Commitment Definition:
Minimum quantity commitment (MQC) refers to the minimum amount of cargo a shipper agrees to ship using a specified carrier at an agreed freight rate over a specified period. MQC helps shippers handle cargo-related uncertainties like inflated freight rates.
MQC determines the freight rate and provides carriers with adequate information to reserve enough cargo space within a set period. They will also know the type of shipment being transported and plan for the equipment needed. Shippers inform manufacturers of the quantity of goods they need within a specified period, and this helps manufacturers plan their inventories and operations accordingly.
