Charterers and freight traders find cargo to put on ships and find ships to carry cargo.  

Shipowners charter other owners’ ships and commodity groups charter ships to carry other commodity groups’ cargoes.  Charterers have the market knowledge and contacts which enable them to hire in a ship for less than they can hire it out. 

This can be risky. Make the wrong decision, take on an obligation you can’t fulfil, pay more than you can earn and you can lose millions.   

Freight trading, as distinct from chartering, is a high-risk and potentially high-reward business.  It exposes the trader to the freight risks faced by both shipowners and charterers and requires a deep understanding of the risks involved.  Freight trading is often thought of as a tougher job than chartering.  Some freight traders have clients who give them long-term cargo commitments, they have great broking relationships, and they understand where profit can be made from a ship or a cargo and where a poorly timed or poorly negotiated contract can lose it for them.  

Shipbrokers are commercial staff who are the intermediaries between shipowners and the charterers who hire their ships.   

Known as chartering brokers (not to be confused with charterers) or competitive shipbrokers, these brokers earn a commission on the ‘freight’ paid per tonne to carry the cargo from A to B or on the daily ‘hire’ paid to hire the ship for a certain period. 

Shipbrokers can also be the intermediaries between the buyers and sellers of ships, this is known as Sale & Purchase (S&P). These brokers earn a commission on the sale price of the ship. 

A shipbroker’s clients are the shipowners, charterers or the buyers & sellers of ships.   

The majority of shipbrokers specialise in particular vessel types and sizes and even in certain geographical trades.  E.g. tanker, dry bulk, LNG, containers, chemicals/products, Handysize, Panamax, Atlantic, Pacific, etc.