The textbook answer to this question is that a shipbroker is an intermediary between shipowners and cargo owners. They bring the two together, negotiate a contract and see it through until the shipping contract is finished.
There are approximatley 8,000 bulk carriers around the world the majority of which are floating freight taxis looking for the best paying business. No cargo owner can possibly keep a tabs on where all these ships are. This is the role of the broker. There are literally thousands of firms that have cargo. Mining companies, trading companies, agribusiness's, governements, aid agencies etc etc. No shipowner can possibly know who has what and where! This is the role of the broker.
Brokers bring the two together and get paid a commission for there services. These commissions are very lucrative. Brokers generally charge 1.25 pct of the entire freight bill. Therefore is 30,000 mt ton gets shipped from Australia to india at usd 25 per ton - the commission earnt by the broker is asf; 30,000 x usd 25 = total freight bill usd 750,000 x 0.0125 = usd 9,375.
The biggest deal i have ever done was a contract of affreightment (multi shipment deal over 5 years) deal worth approximately usd 2 million in total commissions.
- The Virtual Shipbroker
- Hi. I am a shipping company director, transport academic, author, family man and all round nice guy. I have worked as shipbroker, shipowner, freight trader and bulk charterer, in senior positions, with some of the largest and most disrespected (joke) companies in the world. Ask my advice on all things shipping and you will receive my blunt and always honest answer. Hang around to learn more about chartering and ship broker salaries, chartering and ship broker jobs, chartering and shipbroker recruitment agencies, cheap freight, maritime education, chartering and ship broker qualifications, become a ship broker, tips on how to be a successful bulk shipping executive, philosophy, Zen and the art of shipbroking, and much more. Yours The Virtual Shipbroker (recently proclaimed the guru of shipbroking) Copyright © 2009-14 by Virtualshipbroker