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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

Sunday, May 3, 2009

The Business of Shipping

It continues to amaze me the diverse nature of the people who are reading my blog and I am grateful for all the contributions that all of you have made. The shipping business really is a huge business and one that is full of opportunties for people willing to succeed.

With this in mind I wanted to put the current bear market into a little perspective. Yes the market was down 93 percent from its all time highs (now 80 percent), but we need to remember that the market as it currently stands, is still higher than the historical long term average prior to the boom starting 8 years ago.

Shipping Employment - There is no doubt that the employment market is very soft compared to the last 7 years. Only 12 months ago shipbroker firms or any chartering firms for that matter, were finding it very difficult to find people of any level of experience. Times have changed, but in my opinion this was inevitable.

So now more than ever, those of you looking for jobs need to stay positive and patient. This period of industry consolidation will take time to play out. There are still lots of execs on high wages with some time left on fixed term contracts. Yes some firms have put in place wage and employment freezes, but this climate will thaw eventually. I know for a fact that some firms who have recently shed some highly paid staff will start looking over the coming months for new, cheaper (but still highly paid) alternatives. From an industry perspective, it would be bad form to sack people one day and hire new ones the next! For those who have lost their jobs its time to reinvent oneself.

Something to think about - smaller privatley owned shipbrokers, shipowners, chartering companies, have less masters to answer to, and hence will be able to move quicker in a bearish environment. The larger firms, ones that are owned by larger private interest and those that are public, cannot be seen to be splashing out on new employees. Its all about creating a perception of frugality (is that a word?).

You should be thinking about these issues when considering your strategy.

Yours
VS

4 comments:

  1. Very true. This does not just pertain to the shipping industry but to jobs in general. I know a couple 1st year employees who are receiving job promotions without the pay rise. Basically they sacking from the top and pushing up the young essentially getting productivity next to nothing. Junior guys are delighted since they get to keep their job and better yet a promotion whereas everyone else is getting fired.

    VSB - I have a question that is off topic and relates to brokers commission. Lets presume a ship operator decides to take in a ship for a long period essentially going long. Lets say he fixes the Panamax at around 30k / day. The brokers commission is 1.25pct thus $375. Does this mean he get $375 and no more or is it $375 x number of days the ship is taken in?

    Alternatively if they do a cargo 30.5mt x 60,000 dwt x 0.0125. That would be the commission but its only based on the one day.

    Cheers

    ReplyDelete
  2. Hi Jeremy

    Commission is worked per day. So lets say the operator takes the ship for 350 days the brokerage commission is usd 375 x 350 = usd 131,250 bucks! Time for a drink!

    Many shipbrokers survive for 5 or 10 years doing just one deal like the one you have mentioned.

    This is now pure cashflow for the broker - needing less than 30 minutes per day upkeep for the duration of the fixture.

    Bare in mind though the current market is much lower so for a panamax you might may 10k per day. Thats still usd 45 k for one deal, so very nice commissions.

    ++

    next one usd 30.50 per metric tonne x 60,000 ton of cargo - 1.8 million in freight, now x 0.0125 = usd 22,875 bucks.. time for a glass of red..

    Hope this helps.

    Cheers
    VS

    ReplyDelete
  3. When I say many shipbrokers have survived 5-10 years doing a deal like the one mentioned I am obviously referring to a 5-10 year time charter or a contract of affreightment that last 5-10 years.

    ReplyDelete
  4. I have known a lot of friends who went into ship works and they have shared stories on how hard it could it be but the pay is very satisfying and the chance to see the world is great as well. but, isn't it scary as there are some pirate attacks?

    ReplyDelete