Who is?

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

Wednesday, January 6, 2010

When is the shipbroker commission payable?

Good Question from one of the readers.

Answer. Once the freight has been paid and you the shipbroker have invoiced the shipowner. Give the shipowner 30 days to settle your commissions.

NB:

If you are worried about getting the brokerage frm a particular shipowner many shipbrokers ask their 'friendly' charterers, to deduct this amount from the frieght payment and then collect the money from the charterer.

EG

So lets say that total freight is USD 1,000,000
Less
Brokerage USD 12,500.
Owners total revenue is USD 987,500 (thanks gary)

++

Instead - Ask the charterer to only send the onwer USD 987,500 and to send you the shipbroker the USD 12,500 owing (from the owner). This happens all the time. Sometimes the owner gets cranky because they want to control the flow of money. In reality the charterer should have no problem with this.

Cheers
VS

14 comments:

  1. VS / Milano

    Can you write a new post about FFA?

    Cheers

    ReplyDelete
  2. Hello Milano

    What would you like to know?

    cheers
    VS

    ReplyDelete
  3. VS / Milano

    Anything, i have no idea what is it about? Is it just a hedging tool? i can see FFA rate is always lower than the rate physically fixed.

    p.s. I haven't say Happy New Year to you yet (though a little bit late)

    b.rgds,

    ReplyDelete
  4. Technically not 100pct true as some C/P forms such as Gencon forsee brokerage to be payable even if the vessel didn't perform i.e. no freight paid.

    Another remark also to keep in mind, some Owners maybe sneaky and add wording 'non-deductible' after xxx brokerage due on f/d/d (freight, deadfreight, demurrage) which then puts pressure on the broker to ensure the Charterers perform and pay every last dime before they collect their commission from the Owners.

    Have a great day.

    ReplyDelete
  5. Nice one Gary. Havent seen that one yet (personally)! Probably because for the last 7 years I deal only with exclusive clients. The owners wouldnt dare!

    Brokers take note...

    The onus is on the broker to pick that up before a a counter is given. Just because an owner asks for it doesnt mean that you as the broker must agree.

    Everything is negotiable....

    ReplyDelete
  6. Dear VS

    What have you done special that made you have your clients as exclusive to you? Any techniques we can learn from the master?

    Also what is the usual procedure (timeframe) for payment to the shipowners by charterers.ie in goods, one has LC at sight, or 30, 45, 60, 180 days. So would this have a knock on effect on the shipowners receiving their money, if the charterers receive LC on CNF cost basis.

    Z

    ReplyDelete
  7. Z

    The keys to exclusivity are these

    1. Knowledge
    2. Focus (on the whale)!
    3. Communication / saleamanship (be able to convince the client)
    4. Value - without adding real value nothing is sustainable....

    I will elaborate down the track.

    Shipowner payment

    The standard is 95 percent within 3 or 5 banking days after the bills have been signed and released at the load port.

    The key for many shipowners is that the charterer has more money (in the bank) than just the money due on this trade! Shipping is a risky business and counter party risk is huge.

    That is why most shipowners ask to see charterers financials before giving them their USD 50 million dollar asset!

    ReplyDelete
  8. When is commission due on new building contracts?

    ReplyDelete
  9. Can i just say people are becoming increasingly rude. This blog is something I do in my own time and cost. That means if people expect me to reply to questions then they should ask in a nice way. Merely posting a question without as much as a 'hello VS' really &(*^% me.

    Cheers
    VS

    ReplyDelete
    Replies
    1. yes very true VS .
      thats the reason i mentioned that some great topics shud be off here and in ur book and thus ups ur price
      just as u have exclusive clients , be a bit exclusive to your paying patrons mate

      Delete
  10. Had fixed with broker company (A), a coa for 6 voyages. During voyage 4, same charterers asked owners via broker company (A) rates for next years coa. Owners gave ONLY an indication via broker company (A). No counter indication or firm offer received from charterers for more than 10 days via broker company (A).
    Instead owners received firm offer from broker company (B) and fixed. Broker company (A) sued owners for lost commissions.

    any ideas or similar cases?

    best regards

    ReplyDelete
  11. Thats a little confusing. Why would company A sue owners when it appears they could not get support from charterers? Owners gave company A an indication and yet charterers countered via other broker...

    Charterers must have had a good reason (in their mind anyway)to do this?

    VS

    ReplyDelete
  12. VS / KF

    1) Any possible for a shipbroker to launch arbitration's toward owners for unpaid commissions? Any certain clause that every broker must include in the c/p negotiations?

    2) During a performing COA, are owners subject to pay for the brokerage commissions for each perform voyage (paid freight) or have the broker having only able issuing invoice upon COA full perform?

    BEST RGDS
    KF

    ReplyDelete
  13. KF / VS

    1) yes they can launch arbitration. As long as the recap and cp state 1.25 pct then go for it. No clause needed.

    2) payment is due with each voyage

    ReplyDelete