Brokering and Chartering Assignment

Topics: Cargo ship, Ship, Cargo Pages: 7 (2724 words) Published: March 30, 2013
Introduction-----------------------------------------------------------------------------------------page 3 The specific functions of the broker and the role they play in the chartering process---page 4-6 The various types of brokers, and whose interests they represent--------------------------page 7 The authority the broker has during negotiations of the charter party---------------------pages 8-9 The roles of the organizations with which the broker usually interacts-------------------pages 10-11 The function of futures contracts and options contracts in the fright market--------------page 12 Bibliography----------------------------------------------------------------------------------------page 13

A broker is an individual or party (brokerage form) that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Distinguish agent: one who acts on behalf of a principal. In general a broker is an independent agent used extensively in some industries. The prime responsibility of a broker is to bring sellers and buyers together. Therefore, a broker is the third -person facilitator between a buyer and a seller. An example would be a real estate broker who facilitates the sale of a property. Brokers also can furnish considerable market information regarding prices, products and market conditions. Brokers may represent either the seller (90 percent of the time) or the buyer (10 percent) but not both at the same time. An example would be a stockbroker, who makes the sale or purchase of securities on behalf of his client. Brokers play a huge role in the sale of stocks, bonds and other financial services.

Shipping Brokers perform a much needed role in the international shipping industry. Their job is to connect the people who own ships to the people who need to have their cargo transported from one place to another via ship. In addition, ship broking is also the process of selling ships between two different shipping companies. Most ship broking can be divided into one of four categories. The first is sale and purchase, or S&P. An S&P broker is in charge of buying and selling ships. The ships may be bought from a shipping company, or a new boat from a boat manufacturer. An S&P broker will discuss marketing trends, sales, give advice on finances, and calculate the earnings for a ship owner. They will try to find employment opportunities for the ships that need them. They help to negotiate the sale of ships between buyer and seller, and sometimes try to sell a ship to the scrap yard. The second thing a shipping broker might do is dry cargo broking. Dry cargo brokers either work for a shipping company, trying to find cargo to be transported, or work for a company that needs to transport cargo, helping them find the best deal on shipping. They are likely to use large databases that contain information about where ships are, who sells what service at what cost, and where the markets are heading so that they can get the best deal for their client. Third is tanker broking, in which tankers of oil, gas, and chemicals are chartered. The skill set needed to sell tanker services is entirely different from that needed for selling dry cargo space. Unlike with dry cargo, the rate for crude oil transport is determined each year to be a single universal rate, which changes the sales dynamic drastically. Finally, the last type of ship broking is container broking, which specializes in the chartering of container ships. Container ships are cargo ships that carry all cargo on truck-sized containers. Fixing a ship is just a part of the shipbroker’s job. After negotiating with the principals involved in the deal either alone or with other brokers, any shipbroker must handle communications among the parties, draw up the details of the agreed charter party—the charterer’s...
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