Types of brokers and their duties



a. Tanker brokers

Shipbrokers who deal with the transport of liquid cargo as in the case of those operating in the dry cargo trade, may be either owners' or charterers' brokers. Although there are those cases where there is only one broker acting as sole intermediary between the parties. The oil companies normally deal with a limited number of highly specialized brokers. The shipowners are aware of this and they allow these special brokers to offer their ships to the oil companies and traders. The tanker brokers also deal with the transport of other liquid cargoes such as vegetable oils, industrial solvents, chemicals, fertilizers, etc.

b. Dry cargo brokers

These are brokers who deal with the transportation of dry commodities, ranging from bulk cargoes like coal, iron ore, grain, bauxite and alumina to packed cargoes. Due to the great variety of products many brokers specialize in one or more commodities or types of vessel. It would not be possible for a single broker to keep himself fully up-to-date in all trades and areas at all times. Here again, as for tanker brokers the big charterers prefer to work through a limited number of brokers, although the charterers are not by any means as big or as few in number as the major oil companies.

c. Sale and purchase and contracting brokers

The sale and purchase brokers must have a thorough knowledge about ships, their construction, and machinery. They act as intermediaries between shipbuilder and ship-owner or between buyer and seller. Their interests do not lie with ships and cargoes. If the broker is agent for the seller, he will try to get top prices for the ship but if he is employed to buy a ship for his principal, he will work at keeping the price as low as possible. This type of broker also arranges for the contracting of ships and must keep in touch with the big shipyards throughout the world. He must know the yards' capacities and which types of ships they specialize in. He must also know the second-hand values of ships and in times of slump he may fall back on the scrap market where the shipbroker is employed to sell old vessels for breakfng up.

 

The shipbroker must always keep up-to-date with the market both for cargoes and ships. He must follow the fluctuations in world trade. It is important that he always has the latest information on the position of ships throughout the world. He should also be aware of what is happening in different countries. The shipbroker must have a good knowledge of the loading and discharging ports, their cargo handling facilities, etc. The shipbroker should keep his principals well informed and always maintain close contact with them.

 

The broker should:

1) always act within the authority vested in him, and should not exceed it unless specially authorized to do so;

2) exercise due diligence and skill in the execution of charter negotiations on behalf of his principal;

3) keep his principal fully informed about all aspects of the market or the third party which may affect the decision of the principal in connection with the business under negotiation;

4) not withhold any information from, or give wrong information to his principal;

5) not reveal any information or act to the advantage of the third party in the negotiations in order to conclude the agreement;

6) take an active part in the negotiations giving advice and making recommendations regarding offers, counters, proposals and compromises by using his knowledge and expertise;

7) investigate the track record of the owner/charterer before recommending him to his principal.

 

A charterer or shipowner who chooses to negotiate a charter directly, without the intermediary services of a broker will be directly responsible for failing to secure the best bargiain for himself if he lacks the necessary expertise or bargaining skills required to do so.

 

Marine Insurance

 

Ships and their cargoes at sea run the risks. These include fire, storm, collision, theft, leakage, explosions and many others hazardous. To protect themselves against these hazardous shipowners, charterers and shippers take out marine insurance policies to cover themselves against the risk of casualties at sea. Marine insurance differs from life, accident and fire insurance because it is very difficult to establish fixed rates in this branch of insurance. Marine insurance today is even more vital to shipping and overseas trade.

We have different types of insurance policies covering the ship from when she is being built right up until the date she is sent to the scrap yard or is written off as a total loss at sea.

There are three main types of property insurance in marine insurance:


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