To those of us in the industry we don't often answer the question
"What does a shipbroker do?"
"We offer a financial service to shipowners and cargoes charterers' - Note:Wikipedia's defines ship broking as a financial service.
More likely we answer with ideas around
- Matching counter parties (thousands of ships / thousands of cargoes)
- Acting as an unbiased intermediary
- Negotiation expert
- Providing market advice
- Expert technical advice (certainly in the area of SNP)
- Expertise in the area of contracts and legal matters
Whats interesting about those layman definitions is that in essence they deal with 'money', often in large sums, and I guess this fulfils some definition of a financial service
From the net - 'Financial Services is also the term used to describe organizations that deal with the management of money'.
I do however think that this doesn't adequately (not by a long shot) cover the role of shipbrokers in the wider market.
BUT.............and there is an increasingly 'big BUT' (Don't google that)
Are shipbrokers or at least the larger savvy ones - morphing into real bonafide financial services companies?
There is no huge news here because players like Clarkson's and Ifchor have large Financial services divisions. In fact for 30 years various shipping companies (mostly in Scandinavia) and on the sale and purchase side of things have helped facilitate financing in some form or another.
To a wider extent this is just part of a global movement where innovation led by fintechs (computer programs that enable banking) mean that non-financial companies can now offer financial products.
Why does this work? Non-financial firms (like shipbrokers, real estate agents, health care providers, Universities etc) – have myriad unique assets, notably a large customer base, unique insights, and crucially, trusted relationships.
Capitalizing on these, some shipbrokers have realised they can offer financial products that help the client and at the same time compliment there core business's.
In a world where shipbrokers are constantly trying to justify value in the market - have these big buys (like Clarkson's and Ifchor) found a way to offer value to customers, stay ahead of the pack and keep growing exponentially.
Not all shipbrokers can offer financial products - this is obvious. Most shipbroking firms are 1-5 people shops with limited asset base. Is this a problem?
Does this have implications for smaller shops?
Its a bit like asking what business is McDonalds in? Most people say hamburgers.....those in the know say 'real estate'.
20 years time. What business is Clarkson's in? Shipbroking (or ................is it banking?)