Description,Categories, and Duties of Ship Broking - Essay Example

Ship Broking Ship Broking Q1 of Ship Broking Ship broking is the process of carrying out the transaction between the vessel owners and the shippers of cargo locally or internationally. Ship broking encompasses a vast specialization such as sale, chartering, and purchase. In all these areas, there are various specializations like tanker, dry cargo, gas, heavy lift, offshore, towage, and salvage brokers (will cocks& Pisanias 1999, p.2). The ship- brokers typically specialize in specific areas of market such as cargo, chemical, passenger vessel, and Roro vessels. The numerous market segments have diverse challenges and uniqueness making the practitioners to acquire vast specializations. Ship broking happens through the shipbrokers who act as the mediators or the agents of the vessel owners and the clients (Schramm 2012, p.146). A competitive ship broking is an opportunity-based business where the brokers may swift and smart moves to accomplish their deals. The brokers have diverse understanding of latest market progress within their areas of operations and because of these skills they possess, they are highly valued by charters. Categories of Ship Broking There are different types of groups in ship broking depending on the kind of cargo involved. The persons who negotiate and organize the charter of a vessel on behalf the charterer and ship owner are the brokers who specialize in dry cargoes brokering, wet cargoes or tanker brokering (Lange 2011, p.41). Duties of Shipbrokers The shipbrokers act as the link between the shippers (clients) and the ship- owners. They have many roles to play in the ship broking transaction, for example. Finding Ships for Cargoes and Cargoes for Ships The fundamental operation of the shipbrokers is to represent the ship-owner and find the jobs for the ships according to the principals of the vessel owner. In case the shipbrokers represent a cargo interest, the brokers’ role is to find suitable ships for the cargo in accordance with the charterer principals. The broker must have a vast knowledge of vessels and cargoes, information about ports, methods of loading and release of various cargoes, weather patterns, demand, and supply of ships. With the advancement in communications technology and sophisticated computing techniques shipbrokers, networks have intensified the brokering business (Talley 2012, p. 305). Brokers as Sources of Information With the modern digital communication evolution communication with brokers have become accessible from any part of the globe be it on land, sea, or air. The exchange of information has emerged reliable and affordable. The large amount of data traverses across the world very fast including the details of fixtures because of advanced communication technology (Carter 2014, p.188). The concluded information about profits, and the market reports, government policies, economic situations and the factors affecting shipping industry. Brokers act as the intelligence of the ship-owners and the charterers. They track the shipping activities, have the latest information regarding the same, and are very resourceful to the owners. Act as advisors to ship owners and the shippers Since the brokers have the vast knowledge about the shipping activities, they advise the owners and charterers accordingly for the development of the shipping transactions (Arvis 2011, p.218). The information given by the brokers help the formulation the business strategies within the marine industry. Large shipping companies have elaborate research outfits collecting data analyzing them to provide relevant information to the clients and owners. Brokers, give advice on possible rate trends and the availability of cargoes or ships. They are also aware of the market rates and most developments of the shipping industry (Veda & Thomas 2014, p.106). Dispute resolver Shipbrokers having the strong relationship and trust with both the owner and charterers can forge a way forward for any complicated problem in the shipping transactions. Many disputes always emerge in the business deals because of misunderstandings and other unpredictable conditions. The brokers act as the intermediaries between both the parties to solve the delicate situations amicably (Prakesh et al. 2012, p. 86). Q2 Explanation and discussion of four basic ship charters with two examples Bareboat or Demise Charter It is the arrangement for the hiring of a vessel whereby management does not include technical maintenance or administration as part of the agreement. The charterer obtains possession and full control of the ship including its legal and financial responsibility. The shipper pays total operating expenses like fuel, crew, port expenses, and insurance. In the case of commercial demise chartering, the charter period may last for long making the charterer acquire the ownership title of the vessel. The demise charter is a form of hire purchase from the shipbuilders marketing their ships and is familiar with tankers and the bulk carriers (Rimmer 2014, p.237). Example of the basic ship charters is the full ship charter a royal Caribbean shipping company with total privacy, exclusivity, and customization offering a unique and excellent memory to think about internationally (Smith 2014, p.168). Full ship charters provide the voyages between Alaska, Asia, Australia, Bahamas, Bermuda, and New England. The royal Caribbean international fleet offers the exotic and spacious event areas at sea. A full charter ship company, Royal Caribbean passenger vessel cruising at sea (Source: Royal Caribbean http://www.royalcaribbeanincentives.com/docs/rccl-pdfs/case_study_booklet_allure_2-10-13.pdf) Voyage Charter In this particular charter, the owner of the ship agrees to lease the cargo to the charterer for a special trip. The cost paid for the voyage includes the cost of all the expenses incurred by the owner as the fuel, loading and the unloading of cargo. The owner of the ship supplies the charterer with services needed for the voyage until the destination. There is a particular period for the services with extension leading to additional charges (Tucker 2014, p.380). Time Charter It is hiring of a vessel for a particular period with management still with the owner but direction of the ship is under the charterer. The shipper pays for all the fuel for the vessel, port charges, and daily hire to the vessel owner (Harrison 2014, p.45). Lump Sum Charter The owner of the ship leases his vessel to the charterer for a particular cargo awaiting shipping to a specified port. It is suitable for the bulk shipments that always need more than one voyage to accomplish delivery. Under the charter, the owner offers to carry the specified cargo at a price according to the tonnage rates per voyage. The contract is always standard in industrial cargos shipment like coals tones, building materials, and metallurgical materials. The example of the type of charter is the Zim integrated shipping limited established in 1945 and has emerged the leading global container shipping industry (Fusai & Roncoroni 2011, p.373). The Zim Company provides reliable and flexible shipping solutions to clients around the world with experienced and dedicated expertise. It majors in the shipping of containers to almost 120 countries globally the Zim controlled 32% by Israel corporation and 68% financial institutions and the ship owners. Zim shipping company, container vessel with containers a waiting offloading at the port (Source: ZIM Integrated Shipping Services Ltd (2015) http://www.zim.com/aboutus/pages/overview.aspx) Dock Charter The contract depends on the port or dock where the charterer receives the vessel upon leasing or the owner while returning. The exchange happens in areas, which accommodates the size of vessel, and area called commercial areas of the port. Q 3 Examples of three ship broking organizations with descriptions The Associated Ship Broking Monaco Partners Jim McLaughlin and Julian established the brokering organization in august 1993, and both of them had jobs London as sale and purchase brokers in 1970.The general migration of various London Greek offices back to their homeland made the strategic move of establishing Monaco a very easy deal. The company has drastically flourished since its inception, having over 20 brokers in china specializing in new building contracting, sales purchase and dry cargo chartering. With the dedicated and experienced expertise speaking various international languages, Monaco has an international market base making high annual returns (Harte 2014, p.169). For instance, concluding business worth USD 30 Billion, and annually earning excess USD 2 Billion. Their services include contracting for new building tonnage, sale, and purchase of existing tonnage, valuation of capacity and new buildings, consultancy and project management. The BRS Ship Broking Barry Rogliano Salles (BRS) is one of the largest full-service ship and yacht broking firms globally. With many global trades carried on sea, shipping and maritime trade has been a lucrative business in nature expanding the growth of the bars. The bars coverage for the marine market is the most comprehensive one such as new building, sale and purchase, and the chartering activities in various shipping sectors. Shipbrokers specialize in the provision of tankers, dry bulk, chemical, offshore, liner, and yachting. The improvement in the information technology sector has increased the development of the BRS strengthening the relationship between the clients and the BRS professional team. BRS consist of a large and highly experienced multinational team offering perfect global services to their customers (Misa 2011, p.3). Second hand, sale & purchase transactions, as well as recycling of tonnage and valuations, are part of services offer by the BRS. The BRS has its headquarters in Paris and many subsidiaries in other countries like Monaco, Oslo, Mumbai, Madrid, Geneva, London, china, and Dubai. The company has a steady financial record annually with significant profit margin. Clarkson the Heart of Global Shipping Clarkson is a globally prominent provider of the integrated shipping services having great network to capture the international customer’s base. The headquarters is in London, and many subsidiaries spread all over the world. The company provides ship broking services, financial services, support, and research services. The Clarkson invest in capital markets in boutique investment banking business focused on international maritime, oil services and natural recourses sector (Johns et al 2015, p.122). The team has specialized professional with diverse knowledge of maintaining healthy relationships with investors in their main areas of business. The expertise has a unique reputation of consolidating innovative deal structures and closing sophisticated transactions. The Clarkson valuation enhances the portfolio valuation services to an extensive range of the ship finance institutions, public companies, and large private owners. 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