Ports of Ukraine, No. 05 (97) 2010
freight market
Konstantin Ilnitsky
According to the State Statistics Committee of Ukraine, in 2009, 157.9 million tons of cargo was transported through the seaports and terminals of our country. For this, many different vessels were chartered, the shipowners of which were paid for the transportation of these cargoes an amount exceeding, according to expert estimates, US$3 billion.
In the shipping market
And how are freight brokers, that is, those intermediaries who help ship owners to find charterers of their ships, and cargo owners (charterers) to find the necessary tonnage for transporting their goods, doing today in this rather big maritime transportation market?
To begin with, we note that theoretically, the volume of the market for services for freight brokers in our region, according to the same experts, can be estimated at 30-40 million dollars.
True, here you can immediately hear a lot of “buts” from specialists. First, work with different types cargo their serious differences, features. Secondly, most of all the above-mentioned volumes of cargo are transported by very large companies that work with large cargo owners. In some cases, they work directly with each other, having in their structure the appropriate freight departments, departments, that is, without intermediaries. And more often they use the services of large brokerage houses, for example, British, Italian or Greek, located quite far from our shores. Thirdly, often cargo owners or ship owners pretend that they work through brokers in order to create opportunities for additional maneuvers. But in reality, they simply bring their freight department to a separate structure in an offshore zone under a different name. Although the staff does the same job: studies the market, negotiates, negotiates a charter, and so on.
During the USSR
Do not confuse the concepts of "frahtun" and broker. Most shipping companies have a freight department, or at least one person, a freighter, who loads the company's own fleet, says Andrey Ivanov, head of Transship UK. The institute of brokers in the Soviet Union was practically absent. The loading of the fleet with foreign trade cargo was provided on monthly "schedules" at the MMF, where all cargo owners and shipowners gathered. And by chartering ships for open market the all-Union association "Sovfracht" was engaged in a monopoly. The only shipping company in the USSR that had a freight department that really worked on the market, and not formally created, was the Soviet Danube, since the specifics of the Danube, the connections between the Danube and the sea were not very clear in Moscow. Therefore, in the SDP transportation service in the freight department there was a group of experienced "freighters" actively working on the market.
All other work on the freight market was concentrated in Sovfrakht, including time charters, which were handled by a special department. Despite a clear, well-established system for planning the transportation of national economic goods, there was still a need for the services of a broker.
There was not enough own fleet to meet the needs of foreign trade associations of the USSR. It was necessary to additionally charter foreign tonnage. In addition, the problem of combating ballast runs constantly arose. Let's say a steamship went to Cuba, and it's unprofitable to return it with ballast. In such cases, they looked for passing cargo in the region for such a vessel. They were called shipments of GIF (cargo of foreign charterers) or MIP (between foreign ports).
So, Ivanov says, if a ship without cargo was released in our shipping company in some region of the world, I called Sovfracht, for example, Serezha Lokhov, who oversaw the north-west, and said that I had a ship in such and such positions. It needs to be released at such and such a time and in such and such a place. Usually within one or two days the transaction was fixed. The south, as far as I remember, was supervised by Andrei Polevoy. That is, there were no more than ten working brokers in the Union, and we knew everyone personally very well, worked on trust and with minimal formalities.
technical revolution
The collapse of the Union approximately coincided with the "technical revolution" in the brokerage business. Previously, the broker had to have a telex. This was the necessary technical basis for his work, providing operational communications. At the same time, the telex was controlled by the KGB, and no one could get it "just like that." Therefore, if a request or answer came by telex, it was clear that a serious person was on the other end. There was no need to check who and what he was.
But with the advent of the Internet, the first Sprint system, computers, a lot of people, in conditions of general uncertainty, rushed into the brokerage business, including chartering.
The union has collapsed, all business ties have been severed, but there are shipowners who are well versed in how to recruit a crew, how to repair a ship, in everything except how to load this ship. And they were forced to deal with semi-professional intermediaries, or even just crooks. All this has led to a huge number of problems in tonnage chartering deals.
The situation with the organization of shipping was aggravated by other well-known problems of Ukrainian shipowners in the 90s of the last century.
Under these conditions, serious cargo owners took the path that, in fact, the whole world was following - the institution of "home" brokers (Homebrokers) was created. That is, formally independent brokerage companies that are actually controlled by cargo owners and work with their cargo. This scheme also fits into the simple creation of a freight department, as a rule, as part of the cargo owner's trading structure.
At the same time, foreign brokerage houses began to actively enter our market in the early 1990s. A number of them are quite successfully working now.
On the whole, our market has recently been characterized by an increasingly clear division into brokers of cargo owners and brokers of ship owners.
Black Sea market
In my opinion, it is generally impossible to talk about some kind of Ukrainian freight market, Igor Matveev, director of shipping for the group of companies, believes. The freight market is international. And there is a serious division in relations with brokers. There are maritime brokers, and above all very large ones, such as Clarkson in London or Vancosta in Genoa, which represent almost the entire nation, with branches all over the world. They account for the lion's share of the world's tonnage charters.
And there is what is called "short sea" and large brokerage companies not considered serious business. These are all consignments of up to 5,000 tons or so. These are the goods in our region that Ukrainian brokers can deal with.
I wouldn't talk about some Ukrainian market either, agrees Oleksiy Yatsenko, director of the brokerage company. But, in my opinion, it is quite possible to talk about the Black Sea market. It is customary to divide markets by regions, and therefore, most often a broker operating in Odessa is interested in all cargo flows within the Black Sea.
You need to be an expert in the region. The ship owner, first of all, chooses a profitable job, taking into account the size of the freight and the subsequent problem of returning the vessel from the port of discharge. If something does not suit him in the direction of Ukrainian ports, then an alternative should be offered, for example, in Bulgaria or Turkey. And the broker needs to understand these markets. If not, then there will be someone who understands the entire region, and the shipowner will work with him. This is all quickly calculated.
For a typical trade ten years ago, having more than two or three brokers was normal. Today, most often - one broker, sometimes - two.
The larger the cargo owner, the more complex the system. One cargo owner may have different brokers or even brokerage houses working with different types of cargo. Narrow specialists are needed everywhere, especially in areas and regions.
Do you really need a broker?
To a single ship owner, a freight broker may seem like an extra person who takes 1.25% of the freight. And this is a lot of money. But if a shipowner has a dozen or two ships, then he may need independent people, whom he does not pay wages, does not send on vacation.
The fact is that various problems endlessly arise in merchant shipping. And a broker who solves many of them for his principal can be very convenient and profitable for him. The broker himself, in order to ensure this need, often has to perform tasks unusual for his profession.
It is very important that in a market where a lot of one-time transactions are made between carriers and cargo owners who do not know each other, brokers act to each other and to partners as a kind of guarantor of business and financial integrity of partners. Therefore, brokers themselves need to constantly study the principals so as not to put themselves at risk.
It is easier for brokers in the Black Sea region to find a language with small cargo owners. When someone enters the market with 3,000 tons of grain or 10,000 tons per month, he definitely needs a broker to help him choose the tonnage.
The task of the broker is to find best option for the shipowner and charterer, says the freight manager of one of the shipping companies. The more effectively he will conduct his negotiations, the sooner he will earn money. He must "negotiate" the deal and convince the charterer that the shipowner is good and gives a good rate, on the one hand. And on the other hand, to convince the shipowner that the charterer pays good money for the current state of the market.
When a broker is exclusive, for example, for a charterer, then his task is to find the best option in favor of the charterer. When he is a homebroker of a shipowner, he thinks first of all about the interest of the shipowner. But in both cases, he thinks about his commission, he lives from it.
In our shipping company, this freight manager says, we receive 60 percent of the cargo through brokers, half of them are Ukrainian. Theoretically, we could reduce the number of goods going through brokers by up to 20 percent in order to save money, so to speak. But the game is not worth the candle. With a previously established scheme, trying to bypass brokers in the next transaction, the shipowner risks losing a reliable partner who can have much greater ties with various charterers, and thereby make it very difficult to work on the market.
Brokerage commission
The earnings of freight brokers are commissions from the transaction made with their participation. Traditionally, it has been international market that a typical broker commission is 1.25% of the freight cost. If offers are walking on the market with a commission of 2.5%, then most often this means the presence of two intermediary brokers in the chain. 3.75% - three intermediaries.
True, it is often possible to encounter a situation where an increased, so-called targeted commission is paid. Usually at 2.5%. It is paid, of course, to close brokerage companies, which are sometimes just hidden affiliates of the cargo owner.
Among other things, entering the market with a higher targeted fee helps to cut off the "stuck" because if they add their 1.25% to the fee, then total amount commissions will turn away potential customers.
Who are brokers?
When asked how many brokerage companies are in Ukraine today, none of the experts gives a definite answer. Probably several hundred, judging by the number of participants in conferences related to the freight market. But this considerable figure is formed primarily due to lone brokers who do not make “weather” on the market.
After the collapse of the Union, a lot of sailors went to brokers, even captains who were more “in the know” than others.
Recently, these are most often intelligent young guys who end up in the offices of ship or cargo owners, most often start with operations and at the same time study to be brokers, says Alexei Yatsenko. Many of them continue their education in special educational institutions, for example, at the London Freight School. The textbooks are excellent. And education is not cheap. They also teach the basics of brokerage at the Odessa Maritime University and the Maritime Academy.
A common example of today's Ukrainian broker is when he works alone or with a partner from home. They roam the market like wolves looking for a deal. And if they suddenly catch some kind of regular customer with a shipment at least once a month, then they are happy - the year was a success.
Personalized business
Freight brokerage is extremely personalized. The name is the most important property of a broker. If his name suffers, then the business suffers as well. In many other types of business, the head of the company at any stage can take measures to correct the mistakes and inaccuracies of his employees. Maybe even change people. In the case of brokerage, this is unlikely. If a broker lacks professionalism, he may lose business.
Brokerage means working seven days a week, and often around the clock, if the broker has a deal, for example, between a ship owner in Asia and a cargo owner in America, and he must be constantly in touch.
It is common for a broker to receive thousands of messages per day e-mail, from which he must weed out the right one. Many brokers have their own electronic programs, sometimes developed independently or by order.
Working in the freight business imposes quite stringent requirements on the personality of a broker. The broker must have an analytical mind. He must constantly analyze information and issue high-quality recommendations to the client, be able to quickly find solutions in difficult situations. He must be able to win over the client, be able to find compromises between clients. And of course, to be fluent in English.
Moreover, in freight work, the accuracy of wording and fidelity to the spoken word are important. You can't go back on a promise. Once this requirement was even recorded in the motto of British brokers: “Our word is our Bond” (“Our word is a bill”).
Freight practice does not allow deliberate misinformation about the level of freight rates for transactions with other persons or their conditions, and so on.
Ukrainian Freight Exchange
For many years, various policy documents in Ukraine related to the development of maritime transport traditionally included the task of creating a freight exchange. Some steps in this direction have been attempted by private enthusiasts. But unsuccessful. Today, according to the unanimous opinion of all experts, this is a utopia.
Information is a broker's tool, says Alexei Yatsenko. He won't let her out free swimming to any market. It is necessary to work with information carefully, dosed and give it out only to those who can be useful, bypassing competitors not only of their own, but also of their principal. Remember Zhvanetsky's story about how we tried to computerize hotel services in Soviet times. And who, then, will present sweets or another gift to the administrator? So a soulless machine stands, heats a poorly heated room and invents a job for itself. It's almost the same situation here.
Consequences of the crisis
The global financial crisis hit the entire system particularly hard. merchant fleet, including freight brokerage. Many, for example, Turkish brokerage companies simply went bankrupt.
Brokers complain that due to the extremely complex financial terms shipowners or cargo owners are extremely tough in negotiations, but then at the final stage very often refuse to conclude agreements or sign contracts without a real possibility of its implementation. And the huge work done previously by brokers ends in vain.
I was told how Greek brokers from reputable companies work, says Igor Matveev. Firstly, they have a decent salary of several thousand euros. And after half a million commission earned, they start getting 25% of the commission earned. Imagine the volume of transactions to get half a million dollars in commission. But this is Greece with its gigantic fleet. And already as a derivative - and powerful brokerage structures.
And where to get such a number of transactions in Ukraine? Hence the explanation why we do not have a serious brokerage institution. And it will not be until its own powerful fleet appears.
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Brokerage as a professional occupation developed by the end of the last century. By this time the development international trade reached such a level that it was not possible for the owners of cargoes and carriers to follow the continuous market fluctuations in the world freight market and organize the delivery of goods to their destination. Therefore, in the existing system of relations "cargo owner-ship owner" there was a need for a link - brokers - special intermediaries who have information about the availability and nature of cargo, the size of freight rates, proposals for chartering ships and ensuring the docking of the interests of the two parties. In addition, tens of thousands of entities operate on the freight market as shipowners and cargo owners (charterers), which are distant from each other, and sometimes quite significantly, that is, they do not have the opportunity to communicate regularly, do not know each other thoroughly. In addition, the geographic diversity of freight deals, their multiplicity, the speed of conclusion and execution - do not allow the parties to take a closer look, study each other even during the execution of the deal. Hence, this specificity opens up wide opportunities for all kinds of fraud, which is costly for the victims. Under these conditions, both the charterer and the shipowner cannot independently find each other to conclude a deal. Therefore, everyone turns to his broker, who has well-established business ties, who helps to find a suitable counterparty, partner for his principal (ship owner or cargo owner). At the same time, and this is fundamentally important, brokers act to each other and, accordingly, to partners in the transaction, as guarantors of the partners' business integrity and their financial viability. Failure to comply with these guarantees undermines the business reputation of the brokerage firm. Therefore, the study of principals is important element brokerage work and is the key to its success in an environment of constant risk.
The main types of brokerage activities in merchant shipping are: chartering and purchase and sale of ships. Brokerage firms involved in the chartering of ships usually specialize in tramp and liner shipping for certain directions or even types of cargo (types of ships). However, such a division is conditional and reflects only the main specialization of this company and, accordingly, the broker.
According to the field of activity, there are:
However, most often, intermediation is carried out by universal brokerage firms operating in many areas and performing all types of brokerage activities.
Depending on whose interests the broker represents, they are distinguished:
The traditional responsibilities of a broker in chartering ships are varied, but they all serve the same purpose: to achieve the most acceptable terms for their principal.
The principal-owner is interested in the ships to work with the maximum time-charter equivalent ( financial result voyage), without downtime in anticipation of the next voyage, so that the charterers pay the freight and other payments due to the vessel in a timely manner, that is, in obtaining the maximum payment for the minimum services.
The charterer-principal demands from his broker that the cargo be exported in accordance with the terms stipulated by the contract of sale, so that he does not incur extra costs: for storing the cargo in the port after the expiration grace period; for extra insurance of cargo due to the use of a vessel over 20 years old; for payment of demurrage or dead freight to the shipowner, i.e. receiving the maximum of services for the minimum payment.
Responsibilities of a Broker. The traditional duties of a broker are quite numerous. And although the relationship between the broker and the principal is not formalized by an agreement, they are built on established traditions and are reinforced by competition, which makes any brokerage firm achieve a good business reputation, one of the most necessary conditions for its existence, by providing maximum services to the principals. As noted, the broker in the course of negotiations must seek for his guarantor best conditions within the limits of their powers.
With the conclusion (signing) of the charter, the duties of a broker are far from being completed. He assists the charterer and the shipowner in the execution of the transaction; in case of misunderstanding between the parties; when submitting notices; port nominations; using options, etc. Often, he is entrusted with the collection and payment of freight and the subsequent settlement of mutual claims of the parties, if they arise.
Unlike ship agents who work on a commission basis, that is, the guarantors pay the agent all his expenses related to the execution of orders and the agency fee (Agency Fee), the broker works at his own expense, receiving only a brokerage commission (Brokerage) if the transaction has taken place , from which he independently "pays all his expenses, including very significant communication costs (telephone, fax, e-mail, etc.).
Having received an order from the charterer or shipowner for chartering, the broker first of all studies the situation on the freight market, assists the charterer or, accordingly, the shipowner in determining the idea of an acceptable freight rate. To do this, he uses the current information coming through electronic and printed publications, through the instructions of other brokers with whom he maintains constant business contact.
This job requires a broker with a general knowledge of merchant shipping. He must have comprehensive information regarding: the freight market conjuncture, its trends, the level of freight rates in various directions; imagine the deployment of free courts in the area of interest to him and the level of demand for them; know the sources and ways of obtaining quotations of goods and the goods themselves, and much more, depending on the specific situation.
The daily duty of a broker is to: keep abreast of the latest transactions made in the market; know the conditions of transportation of goods circulating on the market; technical and operational characteristics of ships, features of their design and operation; the commercial terms of many pro forma charters, especially the terms of those pro forma most commonly used in practice and the nature of their modifications of the standard terms.
The broker must be aware of the activities of his competitors, have reliable information regarding the financial situation and solvency of ship-owning firms and charterers from his business circle. Finally, he must be well versed in the terms of sales contracts, in particular, in their transport conditions, in the methods of calculating freight rates, quick transformations of one rate into another, for example, a freight rate for a large consignment of cargo into a rate for a smaller consignment, etc. .d.
Possessing all this knowledge, which shipowners and charterers do not always possess, a broker often becomes a decisive figure in negotiations, since both sides listen to his qualified advice. The ability of a broker to give the right advice, along with the ability to successfully negotiate with favorable results, determine the reputation of the broker in the freight market and the volume of his business contacts, which is a decisive factor in the competitive activity of the company in market conditions.
The rapidity of charter negotiations, which are based on the very nature of the volatile freight market, and the fact that it is not profitable for the shipowner to anchor the vessel in anticipation of the successful completion of lengthy negotiations with the charterers, forces the broker to resort to the fastest means of communication with his counterparties, which often located in other countries and even on other continents. Freight negotiations are carried out, at a minimum, by telex communication, which can operate in the telegraph mode, and in real time with direct contact between the parties negotiating. Fax communication, e-mail type communication has high speed. He left the practice and direct contact between the parties by telephone.
Neither side has the right to deviate from the word given by it in firm negotiations if it is accepted by the other side. This circumstance requires special discretion, accuracy and accuracy from brokers, because in negotiations literally one word can decide the success of a business or fail it. No wonder the motto of British brokers is the phrase: "Our word is our Bond", which means: "Our word is a bill."
Neither party has the right to give misleading information regarding the actual position of the vessel, the level of freight rates for transactions concluded by it with other persons and their conditions. But on all these questions, the parties have the right to evade answering. It is not allowed to disclose the terms of the transaction, in particular, the freight rate, if one of the parties asks to keep it confidential. Therefore, for one reason or another, many freight transactions are not included in the flow of market information and are not published in the press.
To establish qualifications for conducting professional brokerage services, as well as relevant advertising in a number of countries, there are various kinds of organizations that provide knowledge testing and certification of brokers as specialists.
For example, in the UK, only members of the London Institute of Freight Brokers, who are considered chartered professionals, can engage in maritime brokering. The activity of the institute of freight brokers is to test the qualifications of brokers by conducting examinations, developing and publishing special norms and customs related to the provision intermediary services etc. Those who pass the exam acquire the right first to membership as a junior specialist, and later to full membership.
In the USA there is an Association of Ship Brokers and Agents based in New York. It develops and publishes the relevant rules and recommendations for brokerage, a code of professional ethics, lists of members, broker fees, etc. Similar organizations (unions) exist in Denmark, Germany, Italy, Sweden, Japan and other countries.
In addition to the listed organizations, in many countries there are various kinds of federations of national associations. The establishment of such federations is dictated by the need to protect the interests of its members, improve, develop and unify cargo documents, and exchange information between ship brokers and agents. An example of such an organization would be the Federation of National Associations of Ship Brokers and Agents -- FONASBA. The founding members of this non-profit international organization are the national associations of Belgium, Denmark, Finland, France, Holland, Italy, Norway, Sweden, Great Britain and Germany.
The largest international organization that plays an important role in brokerage is BIMCO - a non-governmental international professional organization of shipowners, brokers, agents, charterers, mutual insurance clubs and other similar associations, whose main goal is to protect the interests of world shipping and the world shipping community.
The success of brokers in the freight market largely depends on how complete information they have about the availability of goods to be transported and free tonnage. completeness
awareness makes it possible, on the one hand, to assess the relationship between supply and demand for maritime transport services, and on the other hand, to look for the most acceptable proposals. To this end, brokers maintain constant contacts with cargo and ship owners and among themselves. BIMCO publishes lists of broker members, their postal and e-mail addresses, telephone and fax numbers in their bulletins. However, the most extensive and valuable information can be obtained and quickly used at freight exchanges - the centers of concentration of such information, serving as places for the exchange of relevant information between brokers. The most famous of them are in London, New York, Hamburg, Paris, Tokyo.
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broker acting as an intermediary between the shipowner and the charterer in the conclusion
charter contracts.
The right of the broker to receive commission and its
the size is specified in
charter.
Freight- freight, freight (sea trade). App. to freight; cargo. the contract is concluded by the charterer with the charterer.
Dictionary Ushakov
Broker M.- 1. An intermediary (person or firm) at the conclusion of various transactions, acting on behalf of and at the expense of clients.
Explanatory Dictionary of Efremova
Freight App.- 1. Corresponding in value. with noun: the freight associated with it. 2. Peculiar to freight, characteristic of it.
Explanatory Dictionary of Efremova
Broker- -a; m. broker] A firm or person acting as an intermediary in the conclusion of transactions on the stock exchange, acting on behalf of its clients; broker. Auction, insurance b.
◁........
Explanatory Dictionary of Kuznetsov
bill broker- - a person who professionally mediates in the purchase and sale of bills of exchange (usually foreign) on currency and stock exchanges.
Law Dictionary
Stock Broker- -1) employee or representative legal entity- exchange member and exchange intermediary; 2) an independent broker.
Law Dictionary
board broker- - a broker with the task of ensuring an orderly and competitive options market Usually appointed from among the members of the option exchange to fulfill orders ........
Law Dictionary
Broker- (English broker) - an intermediary in the market valuable papers (stock exchange) or on a commodity exchange, performing the functions of buying and selling securities or exchange goods. It usually works....
Law Dictionary
Broker Trading — Job Responsibilities. Performs civil transactions with various kinds of goods on its own behalf or on behalf of clients on the basis of an agreement concluded with them........
Law Dictionary
Broker Trader– a member of the derivatives exchange, which conducts operations both at its own expense and on behalf of clients
Law Dictionary
Bill Broker- - an intermediary in transactions for the accounting of bills and their rediscounting. The greatest distribution of V. b. received in the UK, however, even there their role is significantly reduced, because. functions........
Law Dictionary
Vice Broker- - on the stock exchange: broker's assistant.
Law Dictionary
Freight- see Freight.
Explanatory Dictionary of Kuznetsov
Discount Broker- a brokerage firm that offers a minimum of services in transactions with securities for its clients (for example, only registration of accounts, without legal and other services), ........
Law Dictionary
Investment Broker- - an individual or legal entity that has the right to perform intermediary operations in the securities market, at the expense of the client and on his behalf.
Law Dictionary
Marine Broker- - see Maritime mediation.
Law Dictionary
stock broker- (English, stock broker) - a person acting on his own behalf, selling shares or shares of his clients.
Law Dictionary
Insurance Broker- - legal or individual, registered in the prescribed manner as an entrepreneur, carrying out intermediary activities in insurance ........
Law Dictionary
Customs Broker- - an intermediary who has the right on his own behalf to perform any operations on customs clearance and perform other intermediary functions in the field of customs ........
Law Dictionary
Customs Broker (intermediary)- - an enterprise created in accordance with the legislation of the Russian Federation, which has the status of a legal entity and has received a license from the State Customs Committee of the Russian Federation for the right to customs clearance .........
Law Dictionary
Freight Broker- - a broker acting as an intermediary between the shipowner and the charterer when concluding a commission agreement. The right of the broker to receive a commission and its amount are stipulated in the charter.
Law Dictionary
Freight Contract- - a contract under which the charterer receives at his disposal a ship for the carriage of goods along a certain route or for a certain period; such a contract can...
Law Dictionary
Freight Order- - an order for the chartering of tonnage issued by the charterer to his broker. F. o. contains all the information necessary to conclude a transaction.
Law Dictionary
Freight Market- - the market where transactions on chartering and chartering of tonnage are made. Monetary value of services on F.r. is the price of transportation, which has two forms: freight........
Law Dictionary
Broker, Adam Fomich- - Moscow police chief; genus. about 1762, d. in 1848. Broker's father was engaged in trade in Arkhangelsk, had a large fortune and was famous in the city .........
Big biographical encyclopedia
BROKER- BROKER, -a, m. An agent who mediates in the sale and purchase of securities, goods. Exchange b. * Insurance broker (special) - a company or individual - an intermediary between insurance ........
Explanatory dictionary of Ozhegov
Chartering a vessel is a search for the necessary tonnage (vessel or space on a vessel) for the carriage of cargo, followed by the conclusion of a sea transportation agreement with the shipowner. In other words, we can say that chartering is an agreement to hire a vessel to perform a certain transportation (voyage) or to hire a vessel for a certain period of time.
In the case when the shipowner searches for cargo and concludes an agreement for its transportation, it is called chartering the vessel. In practice, in both cases it is customary to use a single term: “chartering”.
The buyer, seller, sender of the cargo that charters the tonnage (vessel) is called the charterer. A shipowner providing a tonnage (vessel) for the carriage of goods by sea - a charterer. Under a charter agreement, the charterer undertakes to transport the cargo from the port of departure to the port of destination and deliver it to the consignee, and the charterer undertakes to pay a certain fee (freight) for this.
It can be put differently: a contract of carriage by sea is an agreement under which one party (shipping company, shipowner, carrier, charterer) undertakes the obligation to transport goods from one port to another, and the other party (charterer, cargo owner) undertakes to pay for this fixed fee (freight).
Chartering is usually carried out by a special intermediary - a freight broker. Special organizations - brokerage firms or individuals can act as an intermediary. A freight broker is a highly professional specialist with extensive experience and special knowledge. He must be well informed about the situation on the world freight market, supply and demand for tonnage, various cargo flows.
Freight market brokers use various information, bulletins and other publications of the world's largest freight exchanges and brokerage houses. Many brokers have extensive contacts in the shipping industry and it is not uncommon for a broker's personal connections to the shortest time find the required tonnage for transportation.
A shipowner with a free tonnage (vessel or vessels) approaches a freight broker with an offer to find cargo on the market that is suitable for transportation on the terms of the shipowner (as a rule, this most often applies to container shipping). The offer with which the freight broker enters the market on behalf of the shipowner is called an offer. There are solid and conditional sentences.
In the same way, the cargo owner (charterer) acts on the freight market through a freight broker with a proposal to find a vessel that meets the conditions for the transportation of this cargo. The charterer's instruction issued in writing to his broker to search for and charter a tonnage (vessel) for the carriage of cargo is called a charter order. Freight orders are: ordinary (a freight deal can be concluded within 20-30 days), urgent and extra urgent.
The freight market is subdivided according to the form of organization of transportation to the market of tramp and linear tonnage, by types of vessels - to the market of dry cargo and tanker tonnage, by type of cargo - to the market of timber, grain, refrigerated tonnage, etc., as well as by directions of transportation by geographical regions.
The entire volume of the freight market is determined by the number of freight transactions, and its conjuncture is determined by the ratio between the supply of tonnage and the supply of cargo, i.e. tonnage demand. This ratio is subject to sharp fluctuations due to various objective and subjective reasons: a decrease or increase in the volume of traffic, a decrease or increase in the cost of fuel, etc.
Freight indices are used to assess the transport market and the magnitude of price changes. With their help, a detailed analysis of changes in freight rates on the world market, as well as freight rates for certain types of cargo or specific sectors of the freight market, is possible. Indices and information on concluded transactions and freight rates are published by many well-known publications.
The conclusion of charters is a complex negotiation process between the shipowner and the charterer, because they will have to agree on many terms of the contract of carriage by sea. Freight transactions are concluded between parties located in different parts of the world, and thanks to modern means of communication, this task is greatly simplified.
In the world practice of chartering, typical (standard) pro forma charters have been developed, in relation to the main types of cargo transported. The conditions of the pro forma charter reflect the rules for the carriage of goods by sea and specific features such transportation.
The development of charters was carried out by the largest international freight and shipping organizations, which, if possible, tried to take into account all the controversial issues that arise at sea.
Main types of charters:
The charter must contain the name of the parties, the name of the vessel, the type and type of cargo, the cost of the freight, the name of the place of loading of the vessel, as well as the name of the place of destination or direction of the vessel. By agreement of the parties, other conditions and reservations may be included in the charter. The charter is signed by the carrier (ship owner, charterer) and the charterer (cargo owner) or their representatives.
When chartering, the question often arises of the distribution of costs between the shipowner and the charterer for loading and unloading ships (payment for stevedoring). These costs are usually in the range of 10-30% of the final cost of the transport component when shipping cargo by sea. Therefore, when concluding a contract of carriage by sea, it is agreed in advance which of the parties will bear these costs. Here are some of the most used terms:
Brokers and charterers need to be able to calculate transport costs in the intended directions of international cargo flows in order to name the idea of a freight rate.
FREIGHT AGENTS - Brokers specially appointed by major importers or exporters to handle all tonnage negotiations for the transport of their goods.
CHARTER BROKERS are intermediaries between shipowners who are looking for cargo for their ships and charterers who demand ships to carry their cargo.
Broker - a professional business intermediary in transactions, specializing in certain types of goods or services, securities, currencies and other valuables on stock and commodity exchanges, currency, insurance and freight markets. Acts on behalf of and at the expense of clients, receiving special remuneration from them, but can also act on its own behalf, although still at the expense of the principal on the basis of agreements concluded with the client. The broker is looking for a buyer for the seller and a seller for the buyer. Offers, counter-offers pass through it, but the broker itself does not come into contact with the goods. The broker can act as individual, firm or organization. Large brokerage firms and offices
The dictionary consists of entries arranged in alphabetical order A dictionary entry may contain the following items the capital term in capital letters in bold type (for some terms, the specific application is indicated in brackets) the short form of the capital term (if any), separated from it by a comma, one or more synonyms of the capital term (if any), typed in lower case letters and separated from the title term by a comma, the English equivalent of the title term, placed in brackets (if the English equivalent has a short form, then it is separated from the long form by a comma, if there are several English equivalents of the title term, they are separated from each other by a semicolon), interpretation of the meaning of the term (if the heading term has several meanings, then each of them has a serial number - an Arabic numeral with a bracket) If the heading term is repeated in the text of the article, then it is given in an abbreviated form (according to the first letters of its constituent words, for example, Logistics costs - Li) references are widely used in articles. If the text those articles there is a term that is also explained in the dictionary, then at the first mention it is typed in italics to the main term has the form "Sm" The same reference is used when any rarely used or auxiliary term is interpreted in a larger dictionary entry, for example "Freight broker - see Forwarder" In addition to the generally accepted ones ("and so on", and "t p ", "te", etc.) special abbreviations are used that are established for this edition. Their list is given in the book
The majority of such freight deals are concluded between cargo owners and ship owners through intermediaries - ship brokers. Each of them is famous not for its capital (it is almost always small), but for know-how in the form of a complex set of collected information, knowledge, extensive business connections, rarely in all, more often in separate sections of the world freight market.
The brokerage business is developed not only in the UK, but also in many other countries. Brokers in Hong Kong, New York, Tokyo, Piraeus, Hamburg, Genoa, Oslo, Shanghai (before the revolution also in Odessa) have something like professional clubs. Most of the freight deals are made on them.
Sovfracht has retained mainly its foreign correspondent network and is able to carry out any freight operation for domestic exporters and importers, despite the fact that in today's market conditions it is not officially an exclusive broker in the Russian Federation.
The negotiation practice in the brokerage, agency and forwarding world community is based on long-established traditions and follows the principles of observing a kind of brokerage ethics. Recognized in the past in the USSR and a well-known freight broker in our time in Russia, Sovfracht has always followed these traditions and ethics, which contributed to its fame and authority in the freight market.
The contract of carriage by sea (ship charter contract) in tramp shipping, concluded between the sea carrier (charterer) and the consignor or consignee (charterer), has the form of a charter. In most cases, it is concluded with the help of an intermediary or a freight broker.
There are various categories of stock brokers, insurance brokers, freight brokers, foreign exchange brokers.
Shipping 2000. Provides access to freight market data. With the help of the electronic network Shipping 2000, you can connect with 300 brokers and ship owners around the world and conclude a freight contract.
For their services, the broker receives a conditional, often established by trade custom, remuneration. The amount of this remuneration for freight operations is usually 0.25% of the amount of freight, demurrage and other payments.
To successfully conduct freight work, a freighter or broker must have deep and multifaceted knowledge. In addition to a broad general education, charterers need a large amount of knowledge on specific technical issues.
In order to charter or charter a vessel on the open charter market, the shipowner and the charterer must give a corresponding order to the broker, if the negotiations are not carried out directly between the enterprises concerned. Such an instruction may be given orally, in person or by telephone, followed by confirmation in writing by teletype or telegraph, or by letter. The order is also given in writing. In these cases, clients usually resort to telegraph and teletype communications.
A freight broker specializes in transactions for certain types of services on the freight exchange (chartering of ships, purchase and sale of ships, forwarding operations, agency services). At the same time, specialization is also carried out according to the types of vessels, the types of cargo carried, and the directions of transportation. International liner shipping is served by broker-acquisitioners, who not only charter ships, but also perform the duties of a freight forwarder and ship agents, attracting (acquiring) goods to load ships on the lines. ACCOUNTING, registration, documentary accounting of all economic and financial transactions, funds spent and results of economic activities of organizations (enterprises, institutions, companies, firms) in monetary form, carried out according to specified rules, using established forms documents, special journals and books for accounting. In accordance with modern legislation, any organization carrying out economic activities is obliged to conduct Accounting income, expenses, property values and periodically record accounting data in accounting books and reports, which allows you to analyze and control the financial position of the organization, the results of its work, compliance with the rules and norms of economic transactions.
BROKER, courtier, broker (broker) - an intermediary in concluding transactions between buyers and sellers on stock exchanges, freight markets, etc., acting on behalf of and at the expense of principal B, act as "pure" intermediaries, since they usually do not have goods at their disposal. B (brokerage, courtship) usually represents a certain percentage of the goods, securities, various services sold with its help, it can also be paid in the form of a fixed amount See also Agent, Forwarder, Transport Broker
SOVFRAKHT (Sovfra ht) - an organization that performs the functions of a freight broker and general agent of growing shipowners in the field of servicing their ships in foreign ports. It was created in 1929 as an all-Union foreign trade association. brokerage functions, since the 1960s, he has been actively chartering tramp tonnage of owls
Freight broker (we will call it that for convenience instead of shipbroker, although freight broker in translation into Russian means, in principle, a forwarder) usually does not refer to the legal basis of an agency agreement, but emphasizes its independence, readiness to even work simultaneously and the forwarder receives perspectives from a freight broker with whom he has established traditional personal business relations (in Moscow it is Sovfracht, in London it is Morline, in Helsinki it is Krogius Trup, in Hamburg it is Sovchart, etc.). the amount of the transaction, and when concluding it on more favorable terms for the client, he can receive the agreed part of the saved amount.
It specializes in transactions for certain types of services on the charter exchange (chartering of ships, purchase and sale of ships, transport and forwarding operations, agency services). At the same time, specialization is also carried out according to the types of vessels, the types of cargo transferred, and the directions of transportation. International liner shipping is served by broker-acquisitioners, who not only charter ships, but also perform the duties of a freight forwarder and ship agents, attracting (acquiring) goods to load ships on the lines.
