Procedure for negotiation

The negotiation procedure for ship brokers typically involves the following steps:

1. The charterer provides the ship broker with their requirements: This includes the type of ship required, the cargo to be transported, the loading and discharging ports, and the desired charter period.
2. The ship broker identifies and sources suitable ships: The ship broker will use their network of contacts to identify and source ships that meet the charterer’s requirements.
3. The ship broker negotiates the charter contract on behalf of the charterer: The ship broker will negotiate the charter contract with the shipowner on behalf of the charterer. This includes negotiating the freight rate, the duration of the charter, and the loading and discharging ports.
4. The ship broker prepares a fixture recap: Once the charter contract has been agreed, the ship broker will prepare a fixture recap. This is a document that summarizes the main terms of the contract.
5. The charterer and shipowner sign the charter party: The charter party is the legal document that sets out all of the terms and conditions of the charter contract. Once the charter party has been signed by the charterer and shipowner, the charter is binding.

Here are some of the key factors that ship brokers negotiate during the chartering process:

• Freight rate: The freight rate is the price that the charterer pays to the shipowner to transport their cargo. Freight rates can be negotiated on a voyage basis or on a time charter basis.
• Duration of the charter: The duration of the charter is the length of time that the charterer will have the use of the ship. Charters can be for a single voyage or for a period of time, such as a year or two.
• Loading and discharging ports: The loading and discharging ports are the ports where the cargo will be loaded onto and unloaded from the ship.
• Laytime and demurrage: Laytime is the amount of time that the charterer has to load and unload the cargo. Demurrage is the charge that the charterer pays to the shipowner for any time that the laytime is exceeded.
• Other terms and conditions: There are a number of other terms and conditions that ship brokers may negotiate during the chartering process, such as the bunker adjustment factor (BAF), the speed premium, and the ice clause.

Ship brokers play a vital role in the shipping industry by facilitating the chartering process. By negotiating the terms and conditions of charter contracts, ship brokers help to ensure that shipowners and charterers are able to reach mutually beneficial agreements.