Shipbroking
Encyclopedia
Shipbroking is a financial service, which forms part of the global shipping industry
Shipping
Shipping has multiple meanings. It can be a physical process of transporting commodities and merchandise goods and cargo, by land, air, and sea. It also can describe the movement of objects by ship.Land or "ground" shipping can be by train or by truck...

. Shipbrokers are specialist intermediaries/negotiators (i.e. broker
Broker
A broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal...

s) between shipowners and charterer
Chartering (shipping)
Chartering is an activity within the shipping industry. In some cases a charterer may own cargo and employ a shipbroker to find a ship to deliver the cargo for a certain price, called freight rate. Freight rates may be on a per-ton basis over a certain route or alternatively may be expressed in...

s who use ships to transport cargo
Cargo
Cargo is goods or produce transported, generally for commercial gain, by ship, aircraft, train, van or truck. In modern times, containers are used in most intermodal long-haul cargo transport.-Marine:...

, or between buyers and sellers of ships.

Some brokerage firms have developed into large companies, incorporating departments specialising in various sectors, e.g. Dry Cargo Chartering, Tanker Chartering, Container Chartering, Sale & Purchase, Demolition and Research. Other "boutique
Boutique
A boutique is a small shopping outlet, especially one that specializes in elite and fashionable items such as clothing and jewelry. The word is French for "shop", via Latin from Greek ἀποθήκη , "storehouse"....

" companies concentrate on specific sectors of the shipping market.

The principal shipping and shipbroking centres are London
London
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

, New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 and Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...

. Tokyo
Tokyo
, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...

 has a longstanding tradition in shipping/shipbroking, which is now more focussed on Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

ese domestic trade. Other places continue to develop in international shipping services, such as: Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

, Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...

, Delhi
Delhi
Delhi , officially National Capital Territory of Delhi , is the largest metropolis by area and the second-largest by population in India, next to Mumbai. It is the eighth largest metropolis in the world by population with 16,753,265 inhabitants in the Territory at the 2011 Census...

 and Mumbai
Mumbai
Mumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...

; Copenhagen
Copenhagen
Copenhagen is the capital and largest city of Denmark, with an urban population of 1,199,224 and a metropolitan population of 1,930,260 . With the completion of the transnational Øresund Bridge in 2000, Copenhagen has become the centre of the increasingly integrating Øresund Region...

, Geneva
Geneva
Geneva In the national languages of Switzerland the city is known as Genf , Ginevra and Genevra is the second-most-populous city in Switzerland and is the most populous city of Romandie, the French-speaking part of Switzerland...

, Genoa
Genoa
Genoa |Ligurian]] Zena ; Latin and, archaically, English Genua) is a city and an important seaport in northern Italy, the capital of the Province of Genoa and of the region of Liguria....

, Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...

, Oslo
Oslo
Oslo is a municipality, as well as the capital and most populous city in Norway. As a municipality , it was established on 1 January 1838. Founded around 1048 by King Harald III of Norway, the city was largely destroyed by fire in 1624. The city was moved under the reign of Denmark–Norway's King...

, Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

 and Piraeus
Piraeus
Piraeus is a city in the region of Attica, Greece. Piraeus is located within the Athens Urban Area, 12 km southwest from its city center , and lies along the east coast of the Saronic Gulf....

 in Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

; and in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

, outside of New York
New York
New York is a state in the Northeastern region of the United States. It is the nation's third most populous state. New York is bordered by New Jersey and Pennsylvania to the south, and by Connecticut, Massachusetts and Vermont to the east...

 and Connecticut
Connecticut
Connecticut is a state in the New England region of the northeastern United States. It is bordered by Rhode Island to the east, Massachusetts to the north, and the state of New York to the west and the south .Connecticut is named for the Connecticut River, the major U.S. river that approximately...

, Houston is developing as a shipbroking centre.

Until recently, it was commonplace for shipbrokers to cover more than one discipline, although nowadays the vast majority of shipbrokers specialise. The Institute
Institute
An institute is a permanent organizational body created for a certain purpose. Often it is a research organization created to do research on specific topics...

 of Chartered
Chartered
Charter or Chartered might refer to different things:* Charter, a legal document conferring rights or privileges* Chartered , a professional credential* Chartered Semiconductor Manufacturing, a manufacturing company...

 Shipbrokers sets educational standards throughout the industry, Fellow
Fellow
A fellow in the broadest sense is someone who is an equal or a comrade. The term fellow is also used to describe a person, particularly by those in the upper social classes. It is most often used in an academic context: a fellow is often part of an elite group of learned people who are awarded...

ship of which is considered a great honour.

Shipbroking can be categorised as follows:

Sale and purchase

S&P brokers handle the buying and selling of existing or new ships (called newbuildings
Shipbuilding contract
Shipbuilding contract, which is the contract for the complete construction of a ship, concerns the sales of future goods, so the property could not pass title at the time when the contract is concluded...

, in industry parlance). S&P brokers discuss opportunities and market trends with shipowners, report on sales, value Vessels, calculate freight earnings, advise on finance and endeavour to find ships for specific employment opportunities. When a ship is sold, brokers usually negotiate on behalf of the buyer and seller on price and terms and also provide a route to resolving any disputes which might arise. Some S&P brokers specialise in the sale of ships for scrapping
Ship breaking
Ship breaking or ship demolition is a type of ship disposal involving the breaking up of ships for scrap recycling. Most ships have a lifespan of a few decades before there is so much wear that refitting and repair becomes uneconomical. Ship breaking allows materials from the ship, especially...

, which requires a different set of skills.

Dry cargo broking

Dry cargo brokers are typically specialists in the chartering of Bulk carrier
Bulk carrier
A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds. Since the first specialized bulk carrier was built in 1852, economic forces have fueled the development of these ships,...

s, and are appointed to act either for a shipowner looking for employment for a ship, or a charterer with a cargo to be shipped. Dry cargo chartering brokers have to maintain large database
Database
A database is an organized collection of data for one or more purposes, usually in digital form. The data are typically organized to model relevant aspects of reality , in a way that supports processes requiring this information...

s of Vessel positions, cargoes and rates and pay close attention to the direction of the market
Market
A market is one of many varieties of systems, institutions, procedures, social relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering their goods or services in exchange for money from buyers...

s so that they can advise their clients accurately as to how to maximise profits or minimise expenses. Dry cargo shipping can be categorised by Vessel size: namely, Bulkers
Bulk carrier
A bulk carrier, bulk freighter, or bulker is a merchant ship specially designed to transport unpackaged bulk cargo, such as grains, coal, ore, and cement in its cargo holds. Since the first specialized bulk carrier was built in 1852, economic forces have fueled the development of these ships,...

 such as Capesize
Capesize
Capesize ships are cargo ships originally too large to transit the Suez Canal . To travel between oceans, such vessels used to have to pass either the Cape of Good Hope or Cape Horn. In effect Capesize reads as "unlimited"...

s, Panamax
Panamax
Panamax and New Panamax are popular terms for the size limits for ships traveling through the Panama Canal. Formally, the limits and requirements are published by the Panama Canal Authority titled "Vessel Requirements"...

es and Handysize
Handysize
Although there is no official definition in terms of exact tonnages, Handysize most usually refers to a dry bulk vessel with deadweight of about 15,000–35,000 tons...

 are the main sectors. Each size of Vessel suits different types of cargo
Cargo
Cargo is goods or produce transported, generally for commercial gain, by ship, aircraft, train, van or truck. In modern times, containers are used in most intermodal long-haul cargo transport.-Marine:...

, trade routes. Thus owners, charterers and brokers tend to specialise in one or other of these sectors.

Tanker broking

Tanker brokers specialise in the chartering
Chartering (shipping)
Chartering is an activity within the shipping industry. In some cases a charterer may own cargo and employ a shipbroker to find a ship to deliver the cargo for a certain price, called freight rate. Freight rates may be on a per-ton basis over a certain route or alternatively may be expressed in...

 of Tanker
Tanker (ship)
A tanker is a ship designed to transport liquids in bulk. Major types of tankship include the oil tanker, the chemical tanker, and the liquefied natural gas carrier.-Background:...

s, which requires different skills and knowledge from Dry cargo broking. Tanker brokers may specialise in crude oil, gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...

, oil products
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...

 or chemical tanker
Chemical tanker
A chemical tanker is a type of tanker designed to transport chemicals in bulk.Ocean-going chemical tankers generally range from to in size, which is considerably smaller than the average size of other tanker types due to the specialised nature of their cargoes and the size restrictions of the...

s.

Tanker brokers negotiate maritime contracts, known as Charter Parties
Charter-party
Charter Party , a written, or partly written and partly printed, contract between a shipowner and a merchant, by which a ship is let or hired for the conveyance of goods on a specified voyage, or for a defined period...

. The main terms of negotiation are freight/hire
Hire
Hire may refer to:*Employment*Rental*Payment for the use of a ship under a time charterHIRE may refer to*Hiring Incentives to Restore Employment Act, a United States law enacted in 2010...

 and demurrage
Demurrage
The term demurrage originated in vessel chartering and refers to the period when the charterer remains in possession of the vessel after the period normally allowed to load and unload cargo . By extension demurrage refers to the charges that the charterer pays to the shipowner for its extra use of...

.

Oil being a fast moving trade, freight rates for crude oil tanker charters are most commonly based on the Worldscale
Worldscale
Worldscale is a unified system of establishing payment of freight rate for a given oil tanker's cargo. Worldscale was established in November 1952 by London Tanker Brokers’ Panel on the request of British Petroleum and Shell as an average total cost of shipping oil from one port to another by ship...

 Index
Index (economics)
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from...

; the Worldscale Assocation publishes base rates annually.

Some specific voyages, such as named voyages (ie, from A to B) and for specialist ships, like LNG tankers (a highly specialised sector of the tanker market), freight rates can be agreed at a fixed rate between the parties.

Container broking

Container brokers specialise in the chartering of container ship
Container ship
Container ships are cargo ships that carry all of their load in truck-size intermodal containers, in a technique called containerization. They form a common means of commercial intermodal freight transport.-History:...

s and provide container ship owners and charterers with market-related information.N

External links

  • www.ics.org.uk The Institute of Chartered Shipbrokers
  • Worshipful Company of Shipwrights
    Worshipful Company of Shipwrights
    The Worshipful Company of Shipwrights is one of the Livery Companies of the City of London.The Shipwrights' Company has not, unlike other Livery Companies, ever received a Royal Charter; instead, it is considered incorporated "by prescription" because the body had for a long time used this title...

  • Worshipful Company of Fuellers
    Worshipful Company of Fuellers
    The Worshipful Company of Fuellers is one of the Livery Companies of the City of London. It is now associated with the whole energy sector, but has its roots in coal: the Fuellers, or coal traders, were originally members of the Woodmongers' Company, which became defunct in the eighteenth century....

  • Baltic Exchange
    Baltic Exchange
    The Baltic Exchange is the world's only independent source of maritime market information for the trading and settlement of physical and derivative contracts...

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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