Ship brokerage is an integral part of commercial shipping. Ships are
chartered every day through shipbrokers for the carriage of cargo worldwide.
Ship brokerage firms are located throughout the world. However, London and New York have always been viewed as essential shipbroking centers. In recent
years, many U.S. ship brokerage firms have relocated to offices in Stamford and Greenwich, Connecticut, and nearby communities. Of course, there is a significant
shipbroking presence in Singapore, Hamburg, and other cities.
Shipbrokers are often described as:
Owner's broker: His/Her job is to help arrange the most profitable
employment of vessels that the shipowner owns or controls (for example, time chartered
ownership), always within the requirements established by the shipowner. Generally, ship owner's brokers are not employees of the ship owner's
company, but in some cases may be. Most often, the shipbroker works for a
separate company and performs ship brokerage services for its principal, the
shipowner. They are the ship owner's agent. Their loyalties are clearly with the
ship's owners.
Charterer's broker: His/Her job is to help arrange the most effective
transportation of the principal's cargo and/or find the right ship at the right
price. In some cases, a charterer will employ in house staff to act as their
brokers. However, as is the case of a ship owner's broker, the charterer's shipbroker often is employed by a separate ship brokerage firm. Once again, an
agency relationship exists and they are the agent of the charterer.
Competitive broker: This is generally understood to be a shipbroker that
sometimes represents ship owners and sometimes charterers.
The shipbroker's basic functions are:
- The shipbroker helps its principals find ships and / or charterers /
cargoes as the case may be.
- The shipbroker must be aware of current freight market conditions and forecast the freight market as best as possible.
- The shipbroker may be asked to render an opinion on the business
credibility of a potential shipowner or charterer as the case may be.
- The shipbroker assists in the negotiation of the charter party.
- The shipbroker prepares the formal charter party once a vessel has been
fixed (chartered).
- The shipbroker may be asked to prepare voyage related documents such
as voyage estimates, hire statements, laytime, and demurrage
statements, etc.
- The shipbroker routinely assists in the invoicing and collection of time
charter hire and voyage charter freight, dead freight, and demurrage.
- The shipbroker is the communication conduit between the shipowner and
the charterer.
- The shipbroker is often asked to facilitate the amicable resolution of
disputes between the shipowner and the charterer that might arise out of
the charter party's performance.
- The shipbroker should do whatever else is required of his / her principal
if requested.
As we can see, shipbrokers perform many duties, and by no means is the
above list exhaustive. Regardless of the function performed, brokers are
expected to act professionally and in their principal's best interests. Brokers
owe a fiduciary obligation to their principals. It is a service industry that is
exceptionally competitive.
The shipbroker is compensated through commissions. The percentage
varies. For example, it could be 1.25% of the gross freight, dead freight (if any)
and demurrage in the case of a voyage charter, or 1.25% of the hire paid on a
time charter.
Brokerage firms routinely have an operations department. Once a vessel is
fixed by a broker (on behalf of his /her principal), the operations department will
regularly take care of the post fixture work. This includes communicating with
principals (owners and charterers), invoicing, preparation and forwarding of
voyage related documents, among other duties.
Many ship brokerage firms also have a sale and purchase desk (S and P)
responsible for brokering the sale and purchase of ships. S and P is discussed
in another section of this Guide.
Some Reputed Ship Brokerage Firms Information Available in Below Resources:-
Charles R. Weber Co. Located in
Connecticut Charles R. Weber Company, Inc. is one of the oldest and largest ship brokerage firms in the United States
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McQuilling Partners, Inc. has offices in New York and around the world. They
primarily are engaged in the brokerage of dry cargo vessels ranging from
Handymax and Supramax tonnage and larger. Through 10 offices worldwide, we serve clients in the shipping, commodity and financial services industries, providing brokerage for freight and assets; and research, consulting and advisory related to global seaborne transportation and associated disciplines in the supply chain.
-
The web site for the Association of Shipbrokers and Agents (USA) (ASBA)
contains a roster of its members that will enable you to identify member
brokerage firms and their locations.
-
Federation of National Association
of Shipbrokers and Agents (FONASBA) is an association of brokerage
associations worldwide. ASBA is the U.S. representative to FONASBA.
-
BIMCO publishes (for free and available on the web) a booklet called "The Baltic
Code". This provides a good summary of the ship brokering process and ethical
considerations.
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