Sale and Purchase (S&P) Shipbrokers
Sale and Purchase (S&P) Shipbrokers are most active in Second Hand Tonnage and shipbrokers tend to build up connections with potential buyers and sellers as well, of course, with other shipbrokers.
As with dry cargo chartering, it is more the rule than the exception for the buyers and the sellers to have their separate shipbrokers. Invariably, Sale and Purchase (S&P) Shipbroker produce and distribute to shipbrokers of potential buyers, particulars sheets.
The strength of any Sale and Purchase (S&P) Shipbroker’s office lies in the maintenance of records of all ships currently available for sale and a computerized system is ideal for this purpose. The advantage of a computer database over the old-fashioned paper systems lies in the variety of ways it can be ‘interrogated’. A carefully constructed database will allow for a number of different headings which can be electronically ‘flagged’. So that for example one could ask for all ships between 35,000 and 55,000 tons DWAT, between eight and ten years old with two decks and cranes at each hatch and only ships complying with those stipulations will be displayed.
Such a system will be only as good as the data fed into it. Dealing with the purely practical means by which a ship is sold, this is roughly as follows: Once the potential buyer’s requirements are known the particulars of ships within the category are submitted. These particulars are compiled from information supplied by the shipowners, or their shipbrokers, and augmented by details shown in Lloyds Register or the books of other Classification Societies, such as Bureau Veritas, Germanischer Lloyd, Det Norske Veritas or American Bureau.
The most important features are: dead-weight and draft, the year and place of building, dimensions, cubic capacities, cargo handling appliances, arrangements of decks, water ballast capacities, numbers of holds and hatches, details of machinery and its builders, horse power, speed and consumption, bunker capacity, Classification and Special Survey position. This will be followed as far as specialized ships are concerned, with matters such as numbers of passengers, details of refrigerating machinery, pumping capacity of tankers and container and car/trailer capacities.
In the case of ships that are being sold for breaking up it is desirable to give information regarding the light displacement, whether the propeller and spare propeller are of bronze or iron and whether there is a spare tail-shaft on board. Then come two very important features, the price and the position for inspection and delivery. Whether the details are sent electronically or in hard copy which shipbrokers normally use for supplying these details should always have on them some such wording as “These particulars are believed correct but no guarantee is given of their accuracy”.
If a ship has found favor in the eyes of a buyer he will normally ask for a capacity plan to see the arrangements for taking cargo and probably also a general arrangement plan giving such details as the accommodation, requirements for which vary from country to country. It is not the function of the broker to express an opinion regarding the condition of a ship except, of course, if he knows for a fact that something is the matter with her. In the ordinary way, either the buyer’s superintendent or possibly a firm of consulting surveyors deals with this subject on inspection.
One of the most important things to do when buying a ship is to have a look at her classification records, as these give the full history of the ship, during the time she was under construction and also give details of damage she may have suffered, together with Classification Surveyor’s requirements at her various periodical surveys. With a little experience it is very easy to see where the weak spots are and these will naturally be very carefully examined by whoever carries out the physical inspection of the ship.
Sometimes the inspection takes place before the negotiations and sometimes offers are made subject to the examination of the ship. It rarely happens that the ship is dry-docked at the time of this initial inspection. A firm offer for a ship for running purposes is normally made with a time limit on the following lines: – $X less commission, delivery at such and such a port on or about a certain date, with the buyer’s option to cancel the agreement if she is not delivered by a later date, the ship’s class at the time of delivery is to be maintained without qualification. In other words repairs, which have already been deferred for a specific period with the consent of the Classification Society, together with any further repairs that could be placed in the same category, are to be put right. Then there is the question of damage, which is not within the province of Classification Society.
Enough a ship’s class can be fully maintained even if her accommodation has been completely burned out and all her boats washed overboard. Formerly this matter was dealt with by using the words Free of Average, but owing to a decision a few years ago in the Commercial Court, it is now more usual to use some such words as “free of damage recovering from Underwriters” or words to that effect.
Another very important condition is that dealing with additional payment for stores on board and bunkers. It is also usual to stipulate that all the vessel’s trading certificates shall be valid at the time of delivery. Where it applies it is usual to insert a condition regarding Government permission either to buy or sell the ship.
What is Sale and Purchase (S&P) Shipbrokers in shipping?
Sale and Purchase (S&P) shipbrokers are specialized intermediaries in the maritime industry who facilitate the buying and selling of ships for a variety of purposes. This can include the sale of second-hand vessels or the contracting of new ships from shipbuilding yards.
S&P shipbrokers must have deep knowledge of the shipping industry, including the types of ships available, their technical specifications, and their potential uses. They must also understand the current market conditions, including supply and demand dynamics, pricing trends, and the factors that may affect future ship values.
The process typically involves:
- Evaluation: This involves an assessment of the ship’s condition and value. It usually includes an appraisal of the vessel and may involve a physical inspection of the ship.
- Negotiation: Once a potential buyer is found, the broker negotiates the terms of the sale. This can include the price, the delivery date, and other key details.
- Contracting: After the terms have been agreed upon, the broker helps to finalize the contract. This includes ensuring that all necessary paperwork is completed and that legal requirements are met.
- Delivery: Once the contract is signed, the broker may also help to facilitate the delivery of the ship to the new owner.
S&P shipbrokers can work with a variety of clients, including ship owners, charterers, and investors. They may be involved in the sale and purchase of all types of vessels, from bulk carriers and container ships to tankers, cruise ships, and offshore vessels.
In return for their services, S&P shipbrokers earn a commission, typically a percentage of the transaction value. It’s important to note that they have a fiduciary duty to their clients to ensure the best possible terms and conditions in every transaction.
Sale and Purchase (S&P) Shipbrokers’ Duties
Sale and Purchase (S&P) Shipbrokers play a vital role in the global maritime industry. They act as intermediaries between sellers and buyers of vessels, whether they are new builds, second-hand ships, or those destined for demolition. Here are some of their main duties:
- Market Research and Analysis: S&P Shipbrokers need to have a thorough understanding of the current market conditions, trends, and potential future developments. This includes prices, supply and demand, the state of the global economy, trade volumes, and relevant regulatory changes.
- Finding Buyers and Sellers: Shipbrokers are responsible for identifying and sourcing potential buyers and sellers. They may do this through their existing networks, direct outreach, advertising, or attending industry events.
- Negotiation: Once potential buyers and sellers have been identified, the S&P Shipbroker will facilitate negotiations between the two parties. This can include price, payment terms, delivery dates and locations, and any necessary repairs or modifications.
- Vessel Inspection and Valuation: S&P Shipbrokers may also be involved in arranging inspections of ships to ensure they meet the necessary standards and regulations. They may also need to arrange for a ship’s valuation to ensure the price being asked is fair and reflective of its current market value.
- Contract Drafting and Review: They assist in the preparation of contracts for the sale and purchase of ships. They need to ensure that all terms and conditions are clearly laid out, and both parties understand their obligations.
- Completion and Delivery: Upon agreement between buyer and seller, the S&P Shipbroker will oversee the completion of the sale. This includes ensuring all contractual obligations are fulfilled, such as the delivery of the ship, the payment of the agreed price, and any necessary registration or documentation.
- Post-Sale Service: Even after the completion of a sale, the S&P Shipbroker may continue to provide services to both buyer and seller. This could include dispute resolution, advising on future market trends, or helping to source future vessels for sale or purchase.
The S&P Shipbrokers’ goal is to ensure a smooth, efficient transaction that meets the needs and expectations of both buyer and seller. They are skilled negotiators and communicators, with a deep understanding of the maritime industry and the complexities of buying and selling ships.
Role of Sale and Purchase (S&P) Shipbrokers
The trade and acquisition of maritime assets, such as vessels, constitute a pivotal facet within the shipping industry. This undertaking represents a substantial investment, necessitating the involvement of diverse experts who facilitate transactions between two parties. Despite the grandeur of a ship, the presence of a brokerage becomes indispensable. Whether forging new contractual agreements, procuring pre-owned vessels from the secondary market, or orchestrating the scrapping and dismantling of old sea-faring crafts, each transaction mandates the presence of brokers who adeptly oversee these endeavors.
Ship Sale and Purchase Brokers, also known as S&P brokers, embody a highly specialized cadre proficient in the intricate domain of ship trading. Analogous to a proficient real estate agent, a shipbroker assumes the vital role of intermediary, bridging the gap between individuals desiring to purchase or sell ships for maritime endeavors. While they do not possess maritime vessels themselves, they function as facilitators, ensuring the seamless execution of deals.
Responsibilities of an S&P Broker
A vessel embodies intricate technical sophistication. Furthermore, it is traded within an immensely volatile international market. Hence, a shipbroker is necessitated to possess expertise in the market, providing clients with timely and precise information. The responsibilities of a shipbroker encompass the following:
- Facilitating communication between the ship’s owner and potential buyer.
- Offering expert evaluations regarding a vessel’s worth.
- Serving as an intermediary agent.
- Assisting in securing ship financing.
- Engaging in negotiations to establish a shipping contract.
- Assuming responsibility for drafting the S & P agreement.
- Aiding the concerned parties in arranging inspections, surveys, and assessments of the vessel.
- Resolving any prior maritime lien issues.
- Obtaining comprehensive title abstracts and proffering insightful opinions on title-related matters.
- Preparing documentation for vessel registration.
- Addressing any disputes that may arise during the transaction.
A Sale and Purchase (S&P) Shipbroker is engaged either by a prospective buyer or seller to oversee the transaction. They possess a wealth of knowledge concerning ships, their functionalities, legal intricacies, and the art of managing such dealings. Serving as intermediaries, they provide pertinent information to both parties and skillfully negotiate prices and terms on behalf of the principal individuals involved.
While it is feasible for a ship to be directly sold or purchased between the shipowner (seller) and a potential buyer, engaging a broker for these transactions is common practice. This preference stems from the wide range of services and expertise they offer, which enables favorable contract negotiations and optimal pricing. Therefore, if you are involved in the shipping industry and are seeking to sell or acquire a ship, it is advisable to connect with seasoned brokers.
Additionally, Ship Condition Assessment and Inspection play a pivotal role in the ship sale and purchase process. Sale and Purchase (S&P) Shipbrokers assist potential buyers in making well-informed decisions regarding their ship acquisition. The reports generated from ship inspections or assessments provide buyers with accurate insights into the vessel’s seaworthiness and other crucial factors they should consider before finalizing the purchase.
Sale and Purchase (S&P) Shipbrokers
Brokers are indispensable intermediaries bridging the gap between parties seeking to acquire and divest ships. The distinguished cadre of Sale and Purchase Shipbrokers (S&P Shipbrokers) represents a highly specialized group within the realm of shipbrokers. Their esteemed clientele predominantly consists of ship owners.
Sale and Purchase Shipbrokers (S&P Shipbrokers) function as intermediaries in the intricate domain of ship sales and acquisitions, facilitating the transfer of pre-owned tonnage as well as newly constructed vessels.
Sale and Purchase Shipbrokers’ (S&P Shipbrokers’) remuneration primarily takes the form of a commission. Sale and Purchase Shipbrokers (S&P Shipbrokers), in addition to facilitating transactions among ship owners, may also find themselves entrusted with the task of directly selling vessels to demolition yards or cash intermediaries for the purpose of scrapping.
Ships possess intricate technical complexities, and they are procured and traded within an international market characterized by tremendous volatility. The Sale and Purchase (S&P) broker must possess expertise in the ship market, providing prompt and precise information to their esteemed clientele. The responsibilities of the S&P Broker encompass the following:
- Facilitating contact between the seller and buyer.
- Offering evaluations on the valuation of vessels.
- Aiding in the acquisition of ship financing.
- Serving as an escrow agent.
- Assisting in the negotiation of the sales contract.
- Drafting the S&P agreement.
- Facilitating the vessel’s inspection and survey.
- Obtaining abstracts of title and providing assessments on any title-related matters.
- Resolving any preexisting maritime lien issues.
- Preparing documentation for vessel registration.
- Assisting in the resolution of any disputes arising from the transaction.
A professional engaged as a Sale and Purchase Shipbroker (S&P Shipbroker) can be retained by either a prospective seller or a potential buyer.
Sale and Purchase Shipbrokers’ (S&P Shipbrokers’) role involves securing the most favorable price for the client and aiding in the negotiation of advantageous contract terms. While it is possible for a ship to be sold directly by the seller to a buyer without the involvement of a broker, the majority of vessel sale and purchase transactions are conducted through a broker due to the comprehensive range of services and expertise they offer.
Establishing a Sale and Purchase Transaction
Ships are routinely sold for cash, devoid of any charters, mortgages, or maritime liens. Each sale and purchase transaction possesses its unique attributes, but a relatively standard transaction might encompass the following steps:
- Listing the ship for sale with an Sale and Purchase Shipbroker (S&P Shipbroker)
- Negotiating the price and other terms stipulated in the sales contract.
- Preparing the sales agreement.
- Conducting a thorough inspection of the ship by the buyer.
- Facilitating the transfer of funds and the formal transfer of ownership.
The sales agreement can be meticulously crafted by an attorney well-versed in matters concerning sale and purchase. Nevertheless, standardized contractual forms are readily available, including the widely employed Norwegian Saleform. Additionally, there are other commonly utilized standardized agreements, such as the Singapore Sale form. These standardized forms facilitate expeditious consensus.
Sale and Purchase (S&P) Contract forms delineate crucial terms of the agreement, including:
- Vessel particulars.
- Payment amount and method.
- Any required escrow funds.
- Method of vessel inspection (drydock, underwater, sea trials, etc.).
- Scrutiny of the vessel’s documentation, such as records from classification societies.
- Time and location of delivery.
- Inclusions like spare parts, bunkers, or other items pertaining to the vessel’s sale.
- Vessel condition upon delivery.
- Allocation of taxes or fees.
- Documentation necessary for the completion of the transaction.
- Recourse in case of default by either the seller or the buyer.
- Arbitration or alternative means of resolving disputes.
Sale and Purchase (S&P) Contract will also explicitly state that the vessel is being sold unencumbered, devoid of any liens or burdens. For instance: “The Seller affirms that, at the time of delivery, the vessel is devoid of any charters, encumbrances, mortgages, maritime liens, or any other debts whatsoever. Furthermore, the Seller undertakes to indemnify the buyer against any claims or liabilities arising from circumstances predating the vessel’s delivery.”
Liens may have materialized against the vessel due to various reasons. As the shipowner, the Seller may owe wages to the crew or may have neglected to settle payments for vessel repairs or drydocking. Likewise, the vessel may have collided with a dock or a bridge, resulting in significant property damage, or it may have damaged a shipper’s cargo during a previous voyage.
Furthermore, certain maritime liens may have arisen involuntarily, without any fault on the part of the Seller. For example, the shipowner may have time-chartered the vessel to a charterer who failed to remunerate for bunkers, stevedoring, or other goods and services procured by the charterer on behalf of the vessel. The existence of a lien can impede or thwart a sales transaction. Hence, the sale and purchase of vessels entail intricacies that necessitate utmost professionalism and expertise in this significant business endeavor.
Sale and Purchase (S&P) Shipbrokers’ Commission
In the case of Sale and Purchase (S&P) transactions, the shipbroker’s role is particularly crucial. They help to find buyers for ships that owners want to sell and locate ships for potential buyers who want to expand their fleet. It’s a complex process requiring market knowledge, maritime law expertise, and skilled negotiation.
The shipbroker’s commission in an Sale and Purchase (S&P) transaction is typically a percentage of the ship’s selling price. The specific percentage can vary based on the complexity of the transaction, the size and type of the ship, and the market conditions at the time of the sale. It is generally negotiated between the broker and their client before the transaction begins.
Generally, the standard commission for Sale and Purchase (S&P) Shipbrokers is typically around 1% of the sales price, but it can be higher or lower depending on the circumstances.
The commission is usually paid by the seller, but in some cases, it could be split between the buyer and seller, depending on the agreement. The broker earns their commission only when the sale is finalized. This ensures that the broker has a vested interest in facilitating a successful transaction.
It’s also important to note that shipbroking is a heavily regulated industry. Brokers are required to adhere to high ethical standards and can face severe penalties for misconduct. Therefore, their commission is not only a reward for their services but also compensation for the considerable responsibility they bear in ensuring a fair and legal transaction.
BIMCO Ship Sale and Purchase (S&P) Contract
BIMCO SHIPSALE 22
SHIPSALE 22 is a standard Memorandum of Agreement (MOA) for ship sale and purchase. It provides an innovative and comprehensive approach to sale and purchase agreements with clauses following the sequence of events as they play out in a sale and purchase transaction.
Where can I find a Ship Sale and Purchase (S&P) Contract?
We kindly suggest that you visit the web page of BIMCO (Baltic and International Maritime Council) to obtain the original SHIPSALE 22 forms and documents. www.bimco.org
Top Sale and Purchase (S&P) Shipbrokers
Currently, some of the top Sale and Purchase (S&P) Shipbrokers include:
- Clarksons: This is a leading global company in shipbroking, and it provides integrated shipping services. They have a strong presence in S&P for different types of vessels.
- Simpson Spence Young (SSY): As one of the oldest shipbroking companies, SSY offers a variety of services, including sale and purchase of vessels.
- New York Shipbrokers: USA-based shipbroking company with a strong global presence, New York Shipbrokers offer a variety of services, including S&P.
- Howe Robinson Partners: This company provides a wide range of services, including S&P, and they have a strong reputation in the market.
- Braemar ACM Shipbroking: This is another large, global company that offers a variety of services, including S&P.
- Lorentzen & Stemoco: A well-established company providing full-service shipbroking, including S&P.
- Fearnleys: A Norwegian-based shipbroking company with a strong global presence, they offer a variety of services, including S&P.
- Maersk Broker: This firm provides full-service shipbroking, including S&P.
- Arrow Shipbroking Group: This is a significant player in the shipbroking market and provides S&P among other services.
- Affinity Shipping LLP: This London-based firm provides a comprehensive range of shipbroking services, which includes S&P.
- Optima Shipbrokers: A Greek-based company that offers a range of services, including sale and purchase of vessels.
- Advanced Shipping & Trading: A well-known broker that specializes in the sale and purchase of both secondhand vessels and newbuildings.
- Seasure Shipbroking: They offer a comprehensive range of sale and purchase services for all types of vessels.
- Island Shipbrokers: This is a Singapore-based company with a strong presence in the Asia-Pacific region and offers a variety of services, including S&P.
- E.A. Gibson Shipbrokers Ltd: With a rich history dating back to 1891, this company provides a full range of shipbroking services, including S&P.
- BRS Group: BRS is a global leader in the shipping services sector, providing a range of services including sale and purchase.
- Ifchor S.A.: This is a global shipbroking company specializing in dry bulk chartering and other services including S&P.
- Galbraith’s Ltd: Based in London, this company has a longstanding history in the shipping industry. They offer a broad range of services, including S&P.
- Hartland Shipping Services: This is another UK-based company that provides a comprehensive suite of shipbroking services, including S&P.
- Intermodal Shipbrokers Co.: Based in Greece, this company has a global presence and offers a variety of services including S&P.
- Ocean Shipbrokers: This is a global shipbroker with a focus on S&P of commercial vessels and offshore drilling rigs.
- ICAP Shipping: Part of a larger global brokerage group, ICAP Shipping offers a full range of shipbroking services, including S&P.
- Alibra Shipping Limited: Based in the UK, Alibra Shipping provides a range of services including S&P across various types of vessels.
- Eastport Maritime: Operating globally, this company provides a range of services including S&P of vessels.
- Charles R. Weber Company, Inc.: A US-based company that provides a full range of shipbroking services, including S&P.
- Ocean Independence: This company specializes in the sale and purchase of luxury yachts.
Please note that the shipbroking industry is dynamic, and the status and reputation of these companies can change over time due to various factors. Always check the most recent and relevant information when considering these services.