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Sunday, April 11, 2010

Smart Chartering - Negotiation

IMO a good negotiation is a quick one. Not only should it be quick but the outcome should be inline with your goals.

The problem with a drawn out negotiation is that it is inefficient. More time means more propensity for the negotiation to break down.

So here is my tip for chartrerers and for those brokers advising charterers:

1. Have a "proforma" offer / bid sheet with your standard terms ready to go. This bid sheet should have all the terms and clauses that you want included in the final contract.

2. Then when asking for offers state the following - "charterers will only consider offers at charterers terms"...

This way shipowners will run calculations basis charterers terms and not waste time trying to negotiate the periphery terms and conditions.

3. Same with the charterparty. Simply state the following at the end of the 'proforma' bid sheet - "otherwise as per charterers proforma. Proforma available for perusal on first counter".

Before long the marlet (shipowners) will come to understand that your (the charterers) terms are not negotiable and will only offer basis freight rate.

Following these simple rules will save you heaps of time and maybe even millions of dollars!

(ps - there are occassions where a long negotiation can play in your favour - but not often!)


  1. Interesting. Although not sure if tjhe owners will always accept charterer's terms...

  2. Hi Denis

    As I shipowner I would always work charterers terms if they insisted. One proviso - at a price!

    In other wowrds any term is workable depending on the price charterers are willing to pay!

  3. Hi, As a shipowner looking for cargo, is it a bid or offer when negotiating?