The profession of shipbroker
The profession of ‘Shipbroker’ has been in use since the early days of commercial shipping. Originally the owner of the ship was also the trader; he bought cargoes in one place, carried it and sold it in other place. With the evolution of the international trade, the shipbroker became more specialized as it became intermediary who would find ships for the merchants; and cargoes for the ship owners.
The term shipbroker means different things to different people. In Japan and Korea, for example, the term ship broker is only used for the intermediary broker. But in Europe the word ship broker is used to identify a variety of chartering functions. Chartering work is essentially a form of exchange of information. It is a business where the right information at the right moment is essential to be successful. The oxygen of any market is information. Information is what makes a market work. Gathering that information requires time, effort, people, equipment and a network of contact. The parties involved in a chartering deal are one party owns, controls or operates a ship as owner and another party who owns the cargo and looking to be carried by sea transport between two destinations
The basic function of the shipbroker is to bring together the two parties concerned involving the ship and cargo owners, then start negotiation between them in order to fix the vessel. The broker’s income is derived from the commission payable by the ship owner on completion and fulfilment of the contract. Another role of the shipbroker other than fixing the vessel is acting as agent for the ship owner. As such he is responsible for everything which may concern the vessel whilst she is on port such as customs formalities; matters concerning the crew; loading/discharge of vessels; bunkering and so on.
Ship-brokers normally specialize in a specific part of the market; it can be dry cargo, chemical, passenger vessels, RORO vessels etc. It therefore needs a specialist at collecting information, it is no longer possible to be a general shipbroker and have knowledge about every market. Detailed specialist knowledge on certain areas, trades, sizes, commodities or charterers is always in demand as the ship owner, charterer or his representative will often need to learn about a different market depending on where his ship is or what he has to fix. Traders need to know freight rates in order to sell cargoes. All principals need up to date information on which ships are interested in what cargoes, why and at what rates, what cargoes need to be lifted in certain areas at certain times. There is huge variety of interest in the market place. While principals demand the information there is a need for someone to gather it and make sense of it
The Baltic Exchange, the world’s only independent source of maritime market information for the trading and settlement of physical and derivative contracts, is seeking to appoint a new freight market reporter. With the support of 69 international shipbroking companies, the Baltic Exchange publishes independent, high quality dry, wet and gas freight market information on a daily basis. The Baltic acts as a regulatory body for its members and provides a forum for shipping information to circulate amongst its members (Howe Robinson & Co Ltd web site). Peter Kerr-Dineen, joint-chairman of Howe Robinson, also became Chairman of the Baltic Exchange during 2003, (Howe Robinson, 2007). Many larger shipbroking firms have separate departments specialising in Dry Cargo Chartering, Tanker Chartering, Sale & Purchase and sometimes also Demolition sales and Research. Major shipbroking centres include London, Piraeus, New York, Houston, Hamburg, Singapore, Hong Kong, and Shanghai. Major Shipbroking houses are ACM, Clarksons Galbraith, SSY, Braemar Seascope, Charles Weber, Gibsons, and J.E. Hyde
The modern freight market is really more sophisticated. The use of super tankers and also better port equipments and the use of satellite navigation systems have improved much in the ship broking business areas.
In Southampton docks, it used to take several weeks to unload an average cargo ship such as a type bulk cargo ship V Luck, 13 000 tonnes and now only takes a few days to do the same tasks.
Modern ship broking is also nowadays more complicated with the new laws and regulations in regards with all necessary procedures to combat smuggling, and also environmental issues such as global warming.
The Laws in this business are also expanding since there are many countries are now involved in the ship broking business. The contract between the ship owners and the cargo owners is becoming a lengthy process. New terminology in the shipbroking business has also come up. The whole concept of the contract of this kind of business is called the volume contract of Affreightment. These contracts cover the whole concept contract from a charterer’s point of view and Owner’s point of view. It is also containing the definition in the documents and the period and the terminology they both agree to use in the contract during the contract agreements. The European Union Commission, in their International market regulation dealing with professional qualifications is also putting regulations. Under their regulation for the Chartered Shipbroker, the European Union Commission chose the United Kingdom to be the competent authorities on the recognition of qualifications for this regulated profession. At present the competent authorities in the United Kingdom is the Department for Education and Employment Skills located in Moor foot, Sheffield, (Philips, A., 2006).
The Ship broking business is becoming a serious task to be taken care off.
New entrants into the profession do not need to hold a shipping qualification, but there are degrees courses in Maritime Studies at several British universities. The Institute of Chartered Shipbrokers runs a course covering a wide range of subjects culminating in an examination to earn membership of the Institute. The Institute of Chartered Shipbrokers is the professional body for those engaged in all aspects of the shipping business. A Royal Charter was granted in 1920, in recognition of the Institute’s role in conferring a qualification (MICS/FICS) and maintaining professional standards. Membership is international and Institute branches have been established all over the world. There are many other institutes for shipbrokers all over the world