What does a Ship Broker do?

A broker is an individual or party that brings together and arranges transactions between a buyer and seller for a commission when the deal is executed. In the shipping industry, brokers are intermediaries between ship charterers (buyers) and ship owners (sellers).

• Make initial contact with charterers and owners
• Match ship charterers and ship owners
• Assist with drafting of agreements and associated negotiations
• Advise client during preliminary stages of proposal
• Curtail potential disputes & costs
• Iron out stumbling blocks to deals
• Facilitate client's understanding of documents & points of concern
• Pin-point where legal advice is necessary
• Provide market intelligence

How can ship brokers add value?

• Match ship owners with shipyards (where ships are built and repaired)
• Assist ship owners in shipyard selection
• Contribute expertise by advising in ship design stage
• Ensure FAIR principles are applied when facilitating charter negotiations between ship owners and ship charterers. Note that FAIR does not mean equal.
• Fair & realistic distribution of risk in proportion to relative rewards
• Allocate risk to party best placed to assume it
• Insure: Sufficient scope of cover
• Reasonable: Avoid "duplicate" assumptions of risk & minimise potential for dispute 

Sources:
http://en.wikipedia.org/wiki/Broker
http://www.slideshare.net/m3marinegroup/020812-11522704

Difference between Ship Chartering and Ship Broking

I promised to start from scratch so here goes. Initially, I thought this was pretty clear - there are 3 main parties involved in the commercial chain. The ship owner, ship broker and ship charterer.

Ship owner: Owns the ship/vessel and exploits it for commercial gain. The seller.
Ship broker: Intermediary between ship owners and ship charterers.
Ship charterer: Party that requires the ship/vessel for use, such as to transport its cargo. The buyer.

Turns out, there's more than that, which wasn't obvious initially.

Ship brokers and ship charterers could be pretty much the same thing. A ship charterer is 'usually' a party with cargo. However, a charterer could also be a party without cargo - the charterer may take a ship/vessel on charter from the ship owner, then re-lets the ship out to other charterers OR trades the ship to carry cargoes at a profit (in this way, the charterer becomes a broker as well). This is especially profitable in a market where freight/hire rates are rising.

Ship owners can be ship brokers as well - they need not be two separate entities.

Sources:
http://en.wikipedia.org/wiki/Ship-owner
http://en.wikipedia.org/wiki/Shipbroking
http://en.wikipedia.org/wiki/Chartering_(shipping)
http://virtualshipbroker.blogspot.sg/2009/04/shipbroker-trainee-positions.html?showComment=1251063894764#c9094740727411684509

Introduction

Hi there! Welcome to my blog where I'll be journalling my learnings and findings in the Shipping Industry. It'll keep me more disciplined in my quest for knowledge and I'm glad to share the information with anyone out there who's keen to read as well.

I'm an undergrad in Singapore pursuing a business degree. I've not received any formal education in the shipping business and will be starting from close to zero knowledge on the industry. If anybody out there's willing to share a tip or two - or in the same situation as me - feel free to leave a comment :)

With my little knowledge on the shipping industry, it's a little naive to say this now. But my aim is to start my own shipbroking company before I graduate!