I am doing some consultancy for a raw commodity exporter. They / We ran a tender and I managed to to negotiate the shipowners freight rate down by over usd 5.00 during the course of the negotiation (and saved them around usd 200,000). The cargo was from the Black Sea
The company was flabergasted and asked me how did I know that the shipowner would keep reducing their rates - when from the very start of the negotiation they declared that they could do no better than X amount!
The key here is that I was a Shipowner for many years so I know how they think!
Many charterers and brokers fall into the trap of thinking that shipowners have fixed costs and cannot reduce rates. This is not technically true.
Here are a few things you should all know about shipowners
1. They like to be flattered. Tell them that they have been chosen specifically and that charterers have been keen to fix with them for a long time. Massage the ego. Standard accross all industries!
2. Shipowners and shipoperating is extrememly competative. Therefore they are always looking for new business. Promise the world - tell them that this is ongoing biz for the right owner!
3. Find out who they compete with alot and tell them that they are USD 2.00 cheaper! So if Shipowner X is always competing with shipowner Y in many markets then play up to this. By telling them that their mortal competaive enemy is USD 2.00 cheaper then they will surely sharpen their pencils. The other thing is this - shipowners and freight traders find comfort in numbers. If they hear that 3 or 4 other reputable shipowners are also offering on your business at these cheap rates then somehow they can justify this internally.
So play up to that! Its not lying - its poker...
Welcome to advanced negotiating techniques 101.
This post is to give one back for all the unsuspecting charterers out there who have been flumoxed by the super clever shipowners. Sorry shipowners - next time I will let you into a few secrets into what motivates exporters and importers.
Understand your clients and make money!
Yours
VS
I believe sometimes u get a way with just beeing "normal" to the Owners and Charterers. The broker world is full of asslickers and i think its very obvious. I have been broker for 3 weeks and was for 3 years in a shipowning company. I always preffered the brokers who were themselves and to the point without pretending to be too bubbly and flamboyant. because its very easy to spot when ppl beeing fake asses like that.
ReplyDeleteI think that there are brokers, owners and charterers who 'bulls*&t' alot. Remember that all of these have something to sell. I have seen Shipowners promise the world tocharterers and I have seen charterers promise the world to buyers of there goods.
ReplyDeleteThe whole thing is a game of poker, manipulation and flattery. The good negotiators combine flattery with all the good stuff - like excellent value added service. The bad ones look like Gooses!
And the world turns!
VS
Sorry spelling (above) - I didnt check my writng again....
ReplyDeleteHi VS
ReplyDeleteNice one to understand owners mind - as your mentioned, u have tips for manipulating the owners too- for us in cargo owners shoes
thanks
Hi VS,
ReplyDeleteHow much capital do you need to become a shipowner these days? I was wondering if at some point if its possible to make the jump from being a shipbroker to owning a ship. Thanks for your advice.
Regards,
Eduardo Olondriz
How much have you got? Easy way to check is to look up prices for new and second hand bulk carriers. Anywhere from 2-3 million for a clapped out old lady right up to a few hundred million!
ReplyDelete