Shipbroking is a
financial service Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy compani ...
, which forms part of the global
shipping industry Maritime transport (or ocean transport) and hydraulic effluvial transport, or more generally waterborne transport, is the transport of people ( passengers) or goods (cargo) via waterways. Freight transport by sea has been widely used throu ...
. Shipbrokers are specialist intermediaries/negotiators (i.e. brokers) between shipowners and charterers who use ships to transport cargo, or between buyers and sellers of vessels.


In the 19th century, it was the work of ship-brokers to procure goods on freight or a charter for ships outward bound. They also went through the formalities of entering and clearing vessels at the customs-house. They collected the freight on vessels brought into port and took an active hand in the management of all business matters between ship-owners and merchants, whether shippers or
consignee {{Admiralty law In a contract of carriage, the consignee is the entity who is financially responsible (the buyer) for the receipt of a shipment. Generally, but not always, the consignee is the same as the receiver. If a sender dispatches an it ...
s, for which they were paid a fee. In major British ports, ship-brokers were also usually insurance-brokers.

Modern shipbroking

Some brokerage firms have developed into large companies, incorporating departments specialising in shipping's various sectors, ''e.g.'' Dry Cargo Chartering, Tanker Chartering, Container Chartering, Sale & Purchase, Demolition, Futures and Research; other "
boutique A boutique () is a small shop that deals in fashionable clothing or accessories. The word is French for "shop", which derives ultimately from the Ancient Greek ἀποθήκη (''apothēkē'') "storehouse". The term ''boutique'' and also ''d ...
" shipbroking firms concentrate on specific sectors of the shipping market. The principal shipping and shipbroking centres worldwide are London, New York City, Singapore, and Tokyo, as well as where many shipowners are based such as Oslo and Athens. Other places continue to develop in international shipping services, such as Hong Kong and Shanghai, Delhi and Mumbai, Copenhagen, Geneva, Genoa, Hamburg and Paris in Europe; and in North America, Connecticut, Houston, and Montreal are important shipbroking centres. Until the late 20th century, it was commonplace for shipbrokers to cover more than one discipline, although nowadays the vast majority of shipbrokers specialize in a specific sector. Like many financial services, historically shipbroking grew out of the
City A city is a human settlement of notable size.Goodall, B. (1987) ''The Penguin Dictionary of Human Geography''. London: Penguin.Kuper, A. and Kuper, J., eds (1996) ''The Social Science Encyclopedia''. 2nd edition. London: Routledge. It can be def ...
coffee houses, becoming established at the Baltic Exchange; among its most famous members being
Ernest Simpson Ernest Aldrich Simpson (6 May 1897 – 30 November 1958) was an American-born British shipbroker, best known as the second husband of Wallis Simpson, later wife of the former King Edward VIII. Simpson served as an officer in the Coldstream ...
, ex-husband of The Duchess of Windsor (died 1972), and Alderman the Lord Mountevans. The
Institute of Chartered Shipbrokers The Institute of Chartered Shipbrokers (ICS) is a professional and learned society for all members of the commercial shipping industry worldwide. After being founded in 1911 in London, the ICS was granted a Royal Charter in 1920. The Instit ...
sets educational standards throughout the industry worldwide, whose
Fellow A fellow is a concept whose exact meaning depends on context. In learned or professional societies, it refers to a privileged member who is specially elected in recognition of their work and achievements. Within the context of higher educatio ...
s are accorded the privilege of using the post-nominal letters FICS.

Sale and purchase

Sale & Purchase ("S&P") brokers handle the buying and selling of existing vessels in the secondhand market or contract new ships (called
newbuildings Newbuildings or New Buildings is a large village in County Londonderry, Northern Ireland. It lies close to the banks of the River Foyle and south of the city of Derry. It had a population of 3,381 in the 2011 Census. It is within Derry and St ...
in industry ''parlance'') from shipbuilding yards. S&P brokers promote opportunities and discuss market trends with shipowners, charterers, investors and bankers, as well as reporting on market sales, vessel values, market trends and activity. When a shipowner has a vessel to sell or is looking for a vessel to acquire, the shipbroker will scour the market for buyers, or for suitable sales candidates, discuss with potential counterparties or their broker the main points of the sale transaction and eventually negotiate all of the details, usually based on a standard contract. During such proceedings, shipbrokers not only negotiate the price of the vessel on behalf of their principals but also all the logistical details for the transfer of the title and the vessel itself to the buyers (new owners), including the banking arrangements. During any negotiation, minor disputes may occur, which are to be handled in accordance with market fluctuation, ''i.e.'' the market may be moving in favor of the buyer (vessel price is softening) or in favor of the seller (vessel price is strengthening) giving each party a potential reason to cancel the transaction. When shipbrokers act on behalf of passive investors or financial buyers, they may also have to find time charter employment for the vessel and assist with practical arrangements such as the appointment of ship managers. Some S&P brokers specialize in the sale of ships for
scrap Scrap consists of recyclable materials, usually metals, left over from product manufacturing and consumption, such as parts of vehicles, building supplies, and surplus materials. Unlike waste, scrap has monetary value, especially recovered ...
, requiring a different set of skills and contacts.

Dry cargo broking

Dry Cargo brokers are typically specialists in the chartering of
Bulk carrier A bulk carrier or bulker is a merchant ship specially designed to transport unpackaged bulk cargo — such as grains, coal, ore, steel coils, and cement — in its cargo holds. Since the first specialized bulk carrier was built in 1852, econ ...
s, and are engaged to act either for a shipowner looking for employment for a ship, or a charterer with a cargo to be shipped. Dry Cargo brokers maintain large
database In computing, a database is an organized collection of data stored and accessed electronically. Small databases can be stored on a file system, while large databases are hosted on computer clusters or cloud storage. The design of databases sp ...
s of vessel positions, cargoes, and rates, paying constant attention to the direction of the markets so as to advise their clients accurately as to how to maximize profits or minimize expenses. Dry Cargo shipping can, in general terms, be categorized by Vessel size: namely, Bulkers such as Capesizes,
Panamax Panamax and New Panamax (or Neopanamax) are terms for the size limits for ships travelling through the Panama Canal. The limits and requirements are published by the Panama Canal Authority (ACP) in a publication titled "Vessel Requirements". ...
es, and Handysize. Each size of vessel suits different types of cargo and trade routes/ports. Many owners, charterers, and brokers tend to specialize in one or other of these sectors.

Tanker broking

Tanker brokers specialize in the chartering of tankers, which requires a different set of skills, knowledge and contacts from dry cargo broking. Tanker brokers may specialize in crude oil, gas, oil products or chemical tankers. Tanker brokers similarly negotiate maritime contracts, known as charter parties. The main terms of negotiation are
freight Cargo consists of bulk goods conveyed by water, air, or land. In economics, freight is cargo that is transported at a freight rate for commercial gain. ''Cargo'' was originally a shipload but now covers all types of freight, including tran ...
/ hire and
demurrage The term "demurrage" from Old French ''demeurage'', from ''demeurer'' – to linger, tarry – originated in vessel chartering and referred to the period when the charterer remained in possession of the vessel after the period normally allowed ...
. Oil being a fast moving trade, freight rates for crude oil tanker charters are most commonly based on the Worldscale
Index Index (or its plural form indices) may refer to: Arts, entertainment, and media Fictional entities * Index (''A Certain Magical Index''), a character in the light novel series ''A Certain Magical Index'' * The Index, an item on a Halo megastru ...
; the Worldscale Association publishes flat rates
/ref> For some specific voyages, such as named voyages (''i.e.'' from A to B) and for specialist ships, like LNG tankers (a highly specialized sector of the tanker market), freight rates can be agreed on a lumpsum (or dollar per ton) fixed rate between both parties.

Container vessel broking

Container brokers specialize in the chartering of
container ship A container ship (also called boxship or spelled containership) is a cargo ship that carries all of its load in truck-size intermodal containers, in a technique called containerization. Container ships are a common means of commercial intermodal f ...
s and provide container shipowners and charterers with market-related information and opportunities.

Futures broking

Shipping Futures brokers specialise in negotiating
maritime Maritime may refer to: Geography * Maritime Alps, a mountain range in the southwestern part of the Alps * Maritime Region, a region in Togo * Maritime Southeast Asia * The Maritimes, the Canadian provinces of Nova Scotia, New Brunswick, and Prin ...
futures contract In finance, a futures contract (sometimes called a futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The asse ...

See also

* Worshipful Company of Shipwrights *
Baltic Exchange The Baltic Exchange (incorporated as The Baltic Exchange Limited) is a membership organisation for the maritime industry, and freight market information provider for the trading and settlement of physical and derivative contracts. It was locat ...



* * *

External links

The Institute of Chartered Shipbrokers

Association of Shipbrokers and Agents
{{Ship chartering Ship management Merchant navy Shipbroking companies Ship chartering Water transport Livery companies Service companies of the United Kingdom Financial services