Lets talk a little bit more about POWER

Lets talk about power in shipping. shipbroking and business in general.

In a previous post I described a person who was considered the 'best of the best' as a shipbroker - and then I stated that this was in most part due to the power they wielded...

How did this manifest

1. Expert power - there was no doubt this person had great knowledge. At the start of this person career they had been a shipowner and therefore was able to bring unique and strong perspectives to the world of shipbroking. In the late 80's it was rare to find a shipbroker who could run a voyage calculation and one that understood intimately the important metaphoric buttons to push...

3. Coercive power - This is old news for those long in the shipbroking tooth. Shipbrokers expand business and keep business through being powerful. that is why some of the larger shops are the most successful. A powerful shipbroking company or a power individual has 'things' that pothers want. And if those 'things that others want' are worth alot of money and status then its amazing how money keeps rolling in. In its simplest form many shipping companies - both charterers and shipowners are scared of powerful shipbrokers and therefore the shipbroker in question gets more business.  If as a shipowner I no longer want to work with a shipbroker because they have behaved unethically, or because they have provided poor service - how is this possible if the shipbroker has'exclusivity' on heaps of business that I want? Well I can't.I need to dance with the devil baby!!...again nothing new here. This broker in question (from the previous post) had 2 large exclusive clients - and knew very well how to use this leverage to his advantage. He and his company would not be shy in reminding clients that 'support was expected' rather than potentially earned.....which is probably the way the world should be.....but it aint...

Look it isnt all bad here. What is wrong with using leverage? Used in a smart way with sound ethics its perfectly reasonable. the problem occurs when expectations go too far...

3. Social power - What i found the most intriguing and sometimes disconcerting was the open use of social power. This is still very much the case in shipping around the globe. This successful broker was also the most social. If someone was up for a late night out, a boozy business trip, a very long lunch - this guy was there. Not only was he there but his cohort were with him. They moved like a Possy, always within eye sight, always within earshot to laugh at each others jokes, back each other up, and basically present a united front wherever they went...

This was both fun but also disconcerting - I have never been a fan of crowds and although as individuals they were all good guys - as a combination of people - well group dynamics can take over...

Anyway - this combination of power is very intoxicating for all involved and has led to great success. Those wanting to be a part of the possy (customers mostly) readily bought in and the rest is history. This guy lived shipping 24/7...and has made millions as a result.

The one element of power they didn't really have in my opinion was Legitimate power. This is the kind of power that comes easy and is a reward for being great at your job - minus the social and coercive elements. This manifested (for said broker and his cohorts) in certain ways - mainly cynicism, bullying, and the other social problems related to working too long and too hard....a lack of perspective can be damaging. I dont think they have the respect they crave.

So being the best (or perceived to be the best) is not always what its cracked up to be. And in all honesty I think there are quite a few others in that market that are actually more successful in terms of making money, deals done etc but they keep things quiet and play cards close to the chest and have a life outside of shipping.

I think by the tone of this post you can tell which modes operand I prefer.

Keep rocking

VS

The VS blog - number 10 on a list of key Shipping Websites

The Virtual Shipbroker Blog has recently been featured in a list of 95 of the worlds most important and useful shipping websites....

Link to site

Lots of interesting stuff on this website for all shipping, logistics and supply chain professionals

Yours
The Virtual Shipbroker

This Blog

Man how time flies..

Started this blog almost 5 years ago....wow...

The books started not long after. So my baby 'Inside Shipbroking' is almost 5 - WTF??

The good news is that book sales along with viewers keep climbing steadily....

I sell between 8 and10 books per week....which humble as it is - you add that up over 5 years and there are a few thousand Mini VS's clones (ok now its gone to my head) plying their trade in the worlds shipping markets....

I would make a guess that no other shipping book (apart from some text books) would be as widely read...

Reckon the country count is now around 80....

Would not be too many new entrants into the industry who have not read 'inside shipbroking'...

Don't be a stranger Ya'll.......drop me a line and let me know how ya doen!

Yours (a nostalgic and slightly inebriated)
VS

Happened yesterday

At Richards Bay South Africa

160,000 mt of coal on board!

OUCH!!!!!!!!!!!!!!!

The VS Dry Cargo Certificate

So its been a while since I ran one of these courses. I think I have done 6 or 7 of tyhese courses with over 30 graduates. But Gee they take alot of energy and I just needed a break. In truth i still am not ready to run another course but If i keep getting emails like this one then I just might!

quote

Hi VS,

My apologies for not writing in earlier, especially right after the course. There was something wrong with the other email id that was using and then i was probably too lazy to start a new one all these months......finally i've created a new one thus writing in.

I am happy to report that right after I graduated from the course, i doubled the number of fixtures/revenue I was concluding.

It's been a mix of tc, short period and voyage, more of supramaxes than pmx and handy.

I cannot thank you enough for conducting this course - it takes a lot of generosity, self confidence and positivity to share your knowledge with strangers like me - thus transforming lives and careers.

I came across many situations repeatedly where your education/guidance was absolutely bang-on and concluding the deal was hinged on this, and i found myself thanking you in the back of my mind.

I doubt there is any other course/education in this world which imparts such technical and practical knowledge and the jist of years of experience - keep rocking !!!!

unquote

Gee I have awesome Alumni!

makes this VS thingy worthwhile....

even though I am anonymous and cant really share the success of this blog with others (except a modest few) emails like that allow me to smile to myself as I walk to work each morning knowing that some people are getting something out of my shipping related rants.

Sincere thanks

VS

The answer to the Riddle...

POWER (and influence)

Concepts I admit to struggling with over the years. Power is useful, intoxicating, dangerous and evil all at the same time...........in my opinion anyway.

And the idea of POWER is something that rarely gets talked about at corporate lunches, or business functions for one huge reason. People HATE the idea that they are influenced (even controlled) by those who wield power. If they admit this they admit to not being rational or even susceptible to charismatic individuals who get energy from having power. Hence the cliche's explaining the success of some.

POWER - they way I describe it and have seen it over the years is in many guises and I will try and explain more in future posts. If anyone can relate then I am pleased to hear your stories.

A riddle that took me years to figure out

Like any enthusiastic young buck straight out of university and trying to make a name for myself in the world of international bulk shipping, I worked hard and tried to figure out how the be the best shipbroker I could possibly be. Also - as a then unconscious INTJ (see Myers briggs) I see now that I was constantly trying to solve a riddle (because INTJ's are strategists) that in hindsight was not mine for the knowing - just then anyway.

That riddle - the riddle which I posed to all my mentors, colleagues and clients at any given chance, was also in hindsight out of their reach too..

For this riddle only reveals itself to those who look hard enough - in my opinion anyway. You see the problem was that I kept getting the same kind of answers when I asked a simple question - "What makes a great shipbroker?" and more specifically "who is the best shipbroker in the market?"

It was (and still is) a loaded question mind you because like politics - everyone has an opinion. And sure enough the tried and tested, almost cliche'd answers would waft across my bow - especially with regards to what makes a great broker. The usuals like "hard work", "experience", "great customer service" and 'street smarts". I sucked up these answers keen to take it all on board  - although deep down I had suspicions that I could have got the same answers from any business textbook i had read at university.

As for the other question - "who is the best broker"? a curious thing happened. Unlike politics where people had different views - this elicited a reply more common at a birthday party - just about everyone in my market (which is a pretty big one) sang out the same name....Len Maxwell....(not his real name because that would be embarrassing for both of us). This was over 20 years ago now and yep for the next 15 years whenever a discussion was to be had about who is the best most successful broker 'in the land' Mr Maxwells name would invariably come up. There were a few anecdotes about large deals but the crux of any conversations was that if Mr maxwell was the broker then as a competitor you should concentrate on something else.

As a client having Mr Maxwell handle your account was seen as a fairly important thing....it meant your account was worthy of his attention. In the crazy, high end world of million dollar deals and massive ships those of you new to the industry need only hang around for a while before you realise how reputations are made and destroyed in what is a truly global industry.

So back to the riddle - what in my opinion was the real reason Mr Maxwell was considered the 'Best Broker' in the land and how could I tap into this reservoir of riches and respect amongst my peers?

There was one thing he (Mr Maxwell) had more than his competition......and he had it in droves...

Who can guess what that was?........anyone? anyone?...

(oh and a tip - its not something boring like 'passion' - this is not Oprah - try again!

A question from a reader..

Quote

learningshipping has left a new comment on your post "Shipbroker commissions.": 

Hi, I am a shipbroker based in the Philippines. I am actually an old timer in shipbroking, but more of an snp shipbroker than a chartering broker. I am not an expert in chartering problems.

I am having a problem deciding whether a situation my shipowners are in is a case of deadfreight or a breach of contract.

It is said that when the charterer advises the shipowner that he cannot load any cargo
on the vessel, this becomes a breach of contract and not deadfreight because the shipowners can still mitigate his losses by finding a substitute cargo.

But what if the vessel has waited at the load port for more than 30 days (laytime agreed is only 5 days and a complete voyage would only be 15 days), shouldn't that
be considered deadfreight because the time lost is already equivalent to more than one voyage. In other words, the ship owner does not have any time to mitigate his losses.

Would appreciate your comments.

This will help me determine how much brokers commissions I deserve to get. If it is deadfreight,
I believe I should get 100% but if it is a breach of contract, according to clause 15 of gencon, I can only collect 30% from the party at fault.

More power to you!

Bobby 

Unquote

Bobby - excellent question and here are my thoughts...

Simple really - This in my opinion is a breach of contract. If the charterer took 30 days to notify the shipowner that no cargo will eventuate and the ship waited in good faith for that time - then the shipowner should be able to sue for the total amount of freight and any losses for waiting 30 extra days (detention).

The shipowners has been given no opportunity to mitigate so they should sue for the full amount i reckon.

So at the end of the day your commission will need to be claimed when and if the parties go to court and the amounts are settled. 

A deadfreight claim (again in my opinion) is only if part of the contract has actually been fulfilled (or started).

If anyone else has a different take own this matter - feel free to contribute

Good luck Bobby and thanks for the email

VS