Shipbroking

Responsible for matching ships with cargoes, arranging the sale and purchase of vessels as well as broking freight derivatives, UK based shipbrokers continue to dominate the international shipping sector. An estimated 30-40% of dry bulk and 50% of tanker fixtures are transacted by UK based shipbroking firms (source: the Baltic Exchange).

Above: Figures from the Baltic Exchange show that dry bulk freight rates broke records in 2007

Ranging in size from niche sole traders to large publicly listed companies, independent shipbroking firms employ around 5000 staff and provide services to the dry bulk, tanker, container, gas and offshore sectors. Many international shipping companies and trading houses choose to base their chartering teams in and around London not only because of the advantages of the UK timezone, but also to be at the heart of the international chartering scene.

Most UK shipbroking firms are members of the Baltic Exchange and operate within its framework of strict business ethics encapsulated in its 260 year old motto "our word our bond."  In an otherwise unregulated market, trust in the shipbroker is crucial.

UK shipbrokers are able to not only match vessels with cargoes, but also provide crucial market analysis and intelligence as well as risk management services. The past few years has seen a boom in the trading of Forward Freight Agreements (FFAs). FFAs are derivative based products which enable owners, operators, charterers and traders a means of trading freight as a commodity.

The Baltic Exchange provides independent daily shipping indices, fixture lists and forward curve data which are used internationally to settle freight derivative and physical contracts and benchmark freight market performance.
 
The UK is also home of the Institute of Chartered Shipbrokers which provides professional qualifications to shipbrokers worldwide.

Shipbroking companies worldwide have enjoyed increased commissions from a strong freight market. Freight markets are driven by the balance between the supply of available vessels and cargo demand and 2007 was a record year for the dry bulk freight market with dry bulk carriers commanding higher charter rates than ever before.  The crucial role played by shipping in moving trade has meant that the continued expansion of the global economy has led to high levels of activity across all market sectors in the past decade.

Links

The Baltic Exchange
Institute of Chartered Shipbrokers
Forward Freight Agreement Brokers Association
Galbraiths
ACM
Maritime Education & Training
Braemar Seascope
Embiricos Shipbrokers