Shipbrokers

Ship brokers/Shipbrokers and Shipbrokerage

Imperium Commodity Search and her consultants have a broad experience across the shipbroking space; both physical and derivatives.  Commodity trading at its heart relies upon fluidity of movement of goods and shipbrokers are critical to this.  

During the global COVID-19 pandemic, we saw freight rates reach record levels as shipping availability became sparse, containers were stuck in ports and freight companies struggled to man vessels.  This created one of the busiest periods in shipbroking history and proved how critical this role is in the global supply chain of commodities.  
 

What are Shipbrokers?

In simple terms, shipbrokers match ship owners with traders to facilitate the movement of commodities around the world.  In reality, shipbrokers offer a huge array of services, analytics and data to the global markets which have a profound impact on the global trading landscape.  The core of a shipbrokers role in commodities remains the chartering of freight and tanker vessels, but with increased volatility in global markets and more niche shipping needs ever-arising, the services that our shipbroking clients offer have developed into full analytics and advisory suites, ensuring full and detailed market access to trading participants. 

Shipbrokers often manage multiple desks, focused on specific elements of the market and targeted to products, ship classes and client types.  The most common desks in midsize to larger shipbrokerage firms are:  

Physical Charter Brokerage is the cornerstone of the shipbrokerage markets, where brokers match shipowners with traders seeking to move goods around the world.  Brokers on these desks maintain relationships with both trading houses and exporters as well as shipowners to match up supply and demand for particular freight routes.   Brokers take a commission on the agreement between the shipowner and the owner/seller of the goods being transported.  To support the sales activity, brokers keep detailed analytics, insight and data on freight rates and ship availability to be rapid in providing quotations to the market.   Generally, physical shipbrokers are located in tactical positions globally to give the best access to local shipowners and ports.  They will normally provide both time-charter and voyage-charter to their clients.  See our glossary for more shipping definitions. 

Within Physical Charter Brokerage, there are often specialist and niche desks covering specific market segments.  This can be across Tanker Brokerage, Offshore Specialists or LNG/LPG vessels. 

Sale & Purchase (S&P) shipbrokers differ in the sense that they are broking sales of physical ships, rather than the time or voyage rental of shipping space/cargoes.  These brokers will maintain relationships with investors and traders with interest in acquiring or selling vessels within the shipping markets.  Commission for the shipbroker comes from an introduction/percentage fee of sale price for bringing together buyer and seller to facilitate a deal.  

NewbuildingGenerally working closely within S&P departments, newbuilding brokers work with shipbuilders and trading/shipping clients to negotiate and develop contracts for the production of new vessels.

Demolition: Also likely to sit on or near the S&P desk, demolition brokers assist in the recycling and disposal of ships.  As environmental factors become more prominent, demolition teams are a critical factor in ensuring companies dispose of and recycle ships in a sustainable way

Freight Derivatives (FFA or Freight Forward Agreements) are of increasing importance to the global shipping markets.  FFA brokers operate in a similar capacity to commodity futures brokers; managing price volatility and future pricing for shipping routes across defined ship classes and voyages.  For time charter, future prices of shipping routes are priced in USD per Day.  For voyage charter FFA’s are priced in USD per Metric Ton.  Like commodity futures brokers, FFA brokers manage in-depth analysis of the freight markets, offering their clients advisory services and risk management guidance to mitigate shipping price risk.  FFAs differ in one way to other shipbroking elements in the sense that they can be traded by non-shipping participants for profit, much in the same way that energy or grain futures are traded by funds, speculators and prop shops.  The principle remains the same; shipping routes going up, buy! shipping routes going down, sell! 

Research & Analysis brokers often sit within larger shipbrokers to provide market commentary, analysis and advice to anyone involved in the trading, transportation or shipping of commodities and freight.  Traders and shipowners must be on top of freight prices, supply & demand and geopolitical events to ensure liquidity and maximisation of profits.  R&A brokers are critical in ensuring the successful planning of these firms to navigate the often volatile world of commodity trading and shipping. 

Key Shipping/Ship Broker markets: 

The key markets for shipbrokers follow a similar pattern for those in commodities.  Naturally, key ports and trading geographies align and it makes sense for shipbrokers to be positioned as close to their target clients as possible.  

Currently, it is recognised that the global hubs of shipbrokerage are London, New York, Singapore and Tokyo.  Smaller, but significant, shipbrokerage operations are also found in growing numbers in Shanghai, Athens, Geneva, Hamburg, Paris and Houston. 

Some specialist brokers maintain a presence in some more niche geographies to focus on specific markets; for example Denmark for the brokerage of bunker fuel vessels.  

Imperium Commodity Search; Executive and retained search services to the global shipbroking markets

Imperium Commodity Search have a deep understanding and proven track record in the shipbroker markets, working with a number of physical and derivative market participants.  Our team have worked with start-up FFA desks and growth projects on established charter & S&P desks, successfully building and expanding teams  in London, Singapore, Hamburg, Houston and Dubai. 

To view our current shipbroker, shipping operations and support vacancies click here or contact one of our consultants to discuss current careers / jobs in shipping and shipbrokerage to discuss your needs in more detail. 

To arrange a consultation with a recruitment consultant to discuss your hiring needs / growth plans and where we can assist click here or contact one of our consultants directly here for a confidential discussion.

For specialist advice on growth and hiring plans in the Shipbrokerage world, please contact Josh Clark Mark Taylor; our resident shipping & shipbroker specialists

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