VS Tour - I'm off!

Visiting - making myself available to a few friends / clients over the next 3 weeks. London, Geneva, Italy, Spain and Doha.

Look forward to seeing you all.

New blog post (by me) will be in a short hiatus over this time..

Keep rocking
VS

What to do?

Qte

Dear VS

I am a dry cargo broker just under a year now, i've been in non bulk sector before, all together 3 years in shipping sector in London. In this current tight dry bulk market i feel a lot of frustration especially being new broker. I start to doubt whether I shall continue investing myself into dry and expect it to get little busier in the next 5 years, or whilst not too late switch into to other chartering/broking sector (tankers/gas). 
Thoughts of changing location and abandoning Europe is also keep popping up in my mind. Dubai, Feast seem to be more perspective locations for young motivated guys (and girls) with solid shipping base.

What do you think? Apprec for your tips and comments in my not so easy daily "plan B" thinking.

Brgds 

Unqte

Many thanks question and yes it is a tough time for everyone including trainees / young brokers. The market is crap. What you are doing (your thought process) is entirely appropriate and part of a necessary in built risk mitigation gene that all good brokers and wise people should have and cultivate.

FWIW I am always thinking 1,2 - 5 years ahead, considering scenarios and potentialities. This however needs to be weighed against the benefits of knowing when to stay still and be content. There is a time for everything. 

Your reading of the global situation is pretty good. The risk of staying in London waiting for the market to improve is that the East is growing and shipping power has seen a large shift to Singapore and other asian cities.
You also run the risk of getting bored or getting sacked if work doesn't come your way (in london).

My advice to most things is rarely dogmatic and this is no exception. You need to hustle...keep working hard in London but be on the look out for other opportunities...

There isnt necessarily a right or wrong answer but 'be prepared' to take advantage of a new opportunity even if it involves shifting your comfort zone.

So keep hustling and when an opportunity arises you should know then and there if its the right one to pursue.

Best luck - keep rocking and happy fixing...

A philisophical VS

A good question regarding landing a big client..

Quote

Dear VS

Good afternoon!

I love your blog, cause it's really useful and reliable source of shipbroking information.

Can you please share your experience while doing business with big corporations?

You obviously know a lot of them by paying visits to international fairs and conferences.

All of big Charterers and Owners have their own chartering departments and my conversation with them usually ends with:"You are a good guy, but we have our panel brokers, who manage to find tonnage/cargoes for our needs" or "We have enough brokers in our list, so aren't looking to improve it".

I know numerous traders, buyers, shippers, but even they can't give an order or advice to their shipping department regarding freight arrangement. I've even asked whether any procedure to become 'panel list broker' , but my efforts are effortless.

Do you have any idea how is possible to manage this gap or shall I drop it?

Pleased to hear your opinion.

Regards,

KN

Unquote

Dear KN

It's an interesting question and one that i cover quite extensively in 'starting a shipbroking business' - a great read even if I do say so myself....

BTW i realized the other day that I haven't read my own books for at least 3 years. I might do my self a favor and buy a copy. Just kidding - i don't need to buy a copy of my own book.......i'm sure my wife has one.

Anyway back to the question from KN

My short answer is this

You need to be more than just a good guy...

What can you give them that others already don't...

Answer that and you are part way to securing more clients..

Oh - and yes check out the book when you get the chance

VS

An excellent question about bunkers

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Dear VS,

Good day to you!

I recently graduated with a degree in Economics, and am a Trainee with a large Shipbroking firm. Am really new to the industry, and I’ve got a question for you:

In view of the current falling bunker prices, what do u reckon will the market respond, from the perspective of 1) the shipowners, and 2) the charterers (aka the cargo owners). 

Obviously the VOY equiv rates (converted from TC rates) will fall. Will owners respond by increasing the TC rates? Is only APS rates affected, only DOP, or both will be affected? From the other perspective, what will happen to the VOY rates as well?

Thanks, and will really be glad to get a response! 

unquote

Thanks for making contact and a good question. Yes the prices of bunkers (the fuel that powers ships) has been smashed over recent months. 

As to how the market will respond? well pretty simple really. Bunkers are a cost of doing business (for the shipowner). Therefore when a shipowner rates (calculates a price) for a piece of voyage business, with low bunker prices brings a lower price. This is unavoidable. Because shipping is a fairly pure market a shipowner must reduce prices as input costs reduce. If they don't they will lose the business to the competition. 

So yes voyage rates will fall. TC rates aren't imo overly concerned with prices of bunkers. TC rates (time charter rates) reflect the balance between the supply and demand for vessels. A small reaction could be that with smaller input costs ship owners may be more willing to take the longer road to somewhere and avoid canals that have fixed costs. This will suck up supply and potentially push up tc rates. But rates are already so low and shipowners already doing this so I doubt any impact.

Your question about aps vs dop (on a tc basis) is a good one. APS rates (including BB's) should be a little cheaper because the cost to ballast includes bunkers. DOP rates on a tc basis should remain the same.

Keep rockin

VS

Can anyone help with Pavels' excellent question?

Quote

Pavel SosnovskySeptember 14, 2014 at 3:37 AM

Hi!

Tell me pls something like 'del Canakkale via BlSea redel EMed - 6k daily' can be automatically considered as DOP rate? I mean if the owner finished his previous biz let's say in Piraeus and then he ballasted his vessel to Canakkale to hold it there idle waiting for new proposals. In this case Canakkale can't be actually called as 'last port of discharge'. So can this 'del Canakkale via BlSea redel EMed' still be considered as DOP?
P.S. Hope my definitions and explanatios are clear. Many thanks.

Unqte

Go on - I dare someone to answer! Lets get interactive here!!!!!!!!!!!!!

John Fredrikson - A shipping billionaire

From a reader

Quote

Hey VS,

I love your blog! Maybe I'm just not looking hard enough, but no other website out there provides the value that yours does. I instinctively get the feeling there isn't a better site in terms of shipping than yours, because I love this industry and have scoured the web for hours looking for shipping websites.

I have a quick question for you, as you are someone I respect and you also have tons of insight into this industry. What separates the average joe from someone like Mr. Fredriksen? His family was working class, but he still managed to build an empire for himself.

He "started trading oil in the 1960s in Beirut, bought his first tankers in the 1970s, ran crude oil for Iran in the 1980s." How do you go from simply trading to buying tankers worth millions upon millions of dollars? Why Beirut? Did he go for the connections?

I'd be very appreciative of any insight you could give here!

Best regards,

James

Unqte


Good question! I will write an answer in the next day or two. If any readers want to have a go at the answer shoot!

commission only?

AnonymousAugust 11, 2014 at 6:26 PM

 

Hi VS

Im new in this game as a shipbroker and have been in the business as a broker for 12 month now.

I did my first fixture after 6 month and since I have kept on going and I have accumulated for about 100.000 USD.

I have been offered a new contract where there is a amount of fixed cost, after I have passed that amount I will get commission in different stages.

Example: fixed cost per year 50.000 USD , after that will I get commission at 15% and when I from 100.000 I till get 17% and so on

Is that common, that you have a fixed amount you have to pass before you will get your commission ?

And can you tell me how a contract for a shipbroker normally is salary wise?

Best regards
JE

 

unqte

 

Hi JE

 

Many thanks email.

 

I am a little confiused by your email. Are you saying you do not get paid at all until you cover your fixed costs? How do you eat and live before you crack the usd 50,000?

 

VS

 

Im still here!

An extended holiday in FIJI

So shoot me!

Will post something interesting (i hope so anyway) very soon..

Thanks all the messages - slowly replying to all..