I think I should explain exactly how the chartering of a ship fits into the wider international trade process.
Here is a typical example.
1. A buyer identifies a need for a certain bulk product. Could be coal, oil products, grains etc.
2. The buyer finds a seller through commodity brokers, commodity exchanges, or through direct relationships.
3. They begin a negotiation. The negotiation will 10-15 core elements and another 100 or so secondary elements.
They will need to agree on the specifications of the product, the amount of product, the timing of the purchase, any banking and finance issues etc etc.
Importantly they will need to agree on a number of core shipping issues
- Will the product be sold FOB or CIF. IE who will handle and pay for the shipping?
- Timing of ship arrivals at both load and discharge ports
- Clarification of stevedoring and port issues at load and discharge port.
- Ship loading and discharging speeds
- Demurrage and Despatch rates
- Shipping related docuimentation process
plus a few more.
4. During the process the buyer or the seller may be in contact with shipbrokers and shipowners checking freight rates. Once the sales deal is signed off, the next step is the charter a ship!
Bring in the Shipbrokers..Finding and fixing a ship can take anywhere from 5 minutes to 2 weeks, depending on market conditions.
Sometime the cost of shipping (freight) can be higher than the price of the actuial commodity being sold. This happens regularly with low priced high volume cargoes like iron ore and coal.
Any questions about the process? - drop me a line.
- 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 © 2009-17 by Virtualshipbroker