What Are Freight Brokers?---Chartering Broker (I)



Freight broker refers to the third-party to do ship sale, leasing, financing, consulting business on behalf of others,due to the comprehensive in the tech of  freight pay and laws.
Freight broker refers to third-party professionals who specialize in ship sale, leasing, financing, and consulting services on behalf of others. As the technical and legal requirements for shipping transactions are far more complex than those of other industries, it is difficult for both parties to successfully complete the transaction. There are professional brokers to provide services, just as ordinary people must hire a lawyer to fight a laws.

Moreover, freight brokers provide "B2B" services. Most of their service targets are professional companies in the industry (ship owners, charterers, shippers, shipyards). In terms of their professionalism, they far exceed the requirements of other industry brokers, freight brokers need to have a full understanding of shipping and the shipping market, basic knowledge and practical experience in trade, shipping, finance, maritime law, etc., and extensive customer relationships.

Freight brokers play a necessary role in the global shipping market. London and Singapore, the global shipping centers, rely on world-class freight broker companies and master the information resources of global shipping, thereby ensuring their global shipping resources discourse power in configuration.

Shipping market segmentation has created professional brokers in different professional fields who are mainly divided into the following categories:chartering broker, sale&purchase broker, agent, insurance broker.

What is a chartering broker?
Chartering brokers refer to brokers engaged in voyage chartering, time chartering and bareboat chartering in the ship market irregularly. They use their shipping expertise and skills to accept charterers or shipowners’entrustment to provide sources of cargo or ships information, within the scope of its authorization, as the charterer or the agent of the owner of Party B, negotiate the rent, freight and other terms of the charter party with the other party or the agent of the other party, but has no right to independently conclude the charter party.

After the charter party is concluded, the chartering agent shall prepare the charter agreement, track the cargo, and inform the client of the dynamic information in time according to the contract terms agreed upon by the shipowner and the charterer. The service responsibilities that the broker should perform shall continue until the end of the lease, and the commission shall be collected according to the method and proportion agreed with the client in advance.

The chartering market generally refers to non-scheduled chartering. The ships are mainly dry bulk carriers and tankers. It is an almost completely free competition market. Its characteristics are that both the supply side (ship owner) and the demand side (charterer) highly dispersed, each individual supplier or demander has no pricing rights. Both parties have to accept market prices and are evenly matched. The charter party is signed under the principle of freedom of contract. This has led to rapid changes in freight rates, so the Baltic Exchange in London publishes a comprehensive index that reflects the global dry bulk freight rate every day, called the Baltic Ocean Freight Index (BDI).

The first-class chartering brokers have the unique cargo and ship information,and strong market research power,so that they can provide short,medium and long-term market analysis reports to ship owners or charterers,the shipowner or charterer’s own business department cannot reach the level, so they often rely on one or several charter broker companies to obtain market information and analysis. Such as CLARKSON is well-known in the industry for its strong research power. Not only that, charter brokers are also experts in ship leasing,They are not only proficient in chartering contracts in various formats, but also understand the facilities, loading and unloading rates, insurance clauses, hydrology, geography, regulations, conventions, religion, and politics of various countries’ ports. Various factors that may affect chartering. They rely on their information, matching skills, professional knowledge and skills to provide value-added services to shipowners or charterers in the chartering market.

Now It's Your Turn:
Hope this blog can help you know more about chartering broker.Next blog will introduce the sale&purchase broker.
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Established in 2003, jctrans logistics network is a international freight forwarder logistics network. Since founded, JCtrans relies on e-commerce and online public platform to provide global networking services for freight forwarders and other logistical service providers, by means of network marketing promotion, transaction, settlement platform, financial protection, credit system, logistics systems and other diversified services.


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