Shipping is often associated with vessels transporting goods, and that is basically what it is. Looking the word up online you will find that shipping is a process of transporting commodities and merchandise goods and cargo by sea.
The different markets in shipping
The sale and purchase market
In the sale and purchase market, second-hand ships are traded between shipowners. The administrative procedures used are roughly the same as in the real-estate business, using a standardcontract. Trading ships is an important source of revenue for shipowners, as the prices are very volatile. The second hand value of ships depends on freight rates, age, inflation and expectations.
The newbuilding market
The newbuilding market deals with transactions between shipowners and shipbuilders. Contract negotiation can be very complex and extend beyond price. They also cover ship specifications, delivery date, stage payments and finance. The prices on the newbuilding market are very volatile and sometimes follow the prices on the sale and purchase market.
The demolition market
On the demolition market ships are sold for scrap. The transactions happen between shipowners and demolition merchants, often with speculators acting as intermediaries.
The freight market
The freight market consists of shipowners, charterers and brokers. They use four types of contractual arrangements: the voyage charter, the contract of affreightment, the time charter and the bareboat charter. Shipowners contract to carry cargo for an agreed price per tonne while the charter market hires out ships for a certain period. A charter is legally agreed upon in a charter-party(see expressions) in which the terms of the deal are clearly set out. In the freight market the freight rates are constantly changing because of the balance between supply and demand in the market.
Cash flows in the four markets
The purchase and sale market
Cash for ships sold/bought from competitor/partner. – zero sum game.
Cash for old ships paid by shipyards
All the money used on building/buying a new ship.
The freight market
Freight revenue paid by charterer.
Bareboat Charter-Party (Demise C/P) - contract for the hire of an empty ship. The charterer covers all operating costs. Or Bareboat - the hiring or leasing of a vessel from one company to another (the charterer), which provides crew, bunkers, stores, etc. and pays all operating costs.
Bunkers - ship's fuel. To take on fuel, is called bunkering
Charterer - cargo owner or another person/company who hires a ship.
Charter-party - transport contract between shipowner and shipper of goods. (Contract for the hire of a ship or space in a ship.)
Chartering - to hire a ship to carry goods/cargo.
Chartering agent - shipbroker acting on behalf of charterer in negotiations leading to the chartering of a ship.
Bulkcargo - homogeneous dry cargo (not packaged), e.g. coal, grain, iron ore, etc.
Dry cargo - grain, coal, ore, general cargo, etc
Rate - the offered/agreed price for the transportation of goods.
Spotrate - rate for single voyage based on the market situation on the day
Offshore activities (O.A)- for shipowning companies, O.A. include activities connected with the exploration for, development of and operation of oil and gas fields at sea. Most important are: Collecting seismic data, test drilling, field development, towing and anchor handling, the supply service, transportation of equipment and modules, heavylifts, diving operations and underwater work, the use of ROVs, pipelaying, operation of floatels and construction jobs. Salvage and rescue operations are also important aspects of this.
Deadweight - the largest weight of cargo, bunkers and stores a ship is able to carry. Expressed in metric tons (1,000 kg) or long tons (1,016 kg). The deadweight tonnage is the most important commercial measurement. Normally the maximum payload for a ship is three to ten per cent lower than the deadweight, due to the weight of bunkers and stores, etc.
Ship stores – Inventory carried on board of a ship to meet its daily requirements, such as food, water, cleaning supplies, medical supplies, safety supplies, spare parts, etc.
TEUs – Twenty-foot equivalent unit, a measure used for capacity in container transportation.
Barge – is a flat-bottomed boat, buit maintly for river and canal transport of heavy goods.
Some vessel types shipping/offshore:
Bulk ship (bulk carrier) - single deck ship carrying homogenous unpackaged cargoes. Loaded through large hatchways.
Bulk-oil carrier - multipurpose vessel built to carry cargoes of coal as well as oil. Most bulk-oil carriers are reinforced to carry ores and are called OBO-ship (ore/bulk/oil).
Chemical tanker - special tanker built for the transportation of bulk chemicals. Newer tonnage is equipped with stainless steel tanks. Ships may carry many different cargoes simultaneously, because each tank has its own pump and pipeline system for loading and unloading.
Container vessel - Ship specially designed to carry standard containers (TEUs). Generally called Cellular container ship. The larger part of the cargo-carrying capacity consists of containers carried on deck or in cells in the hold. When containers are lifted on and off with special cranes the ships are called lift on-lift off-vessels. Container ships are generally fast.
Anchorhandling Tug - AHT - ship carrying out tasks such as the placing or moving of anchors, as well as towing drilling installations and barges etc. May double as a supply vessel and is in such cases termed Anchorhandling Tug/Supply (AHTS).
Crane and Construction Vessel/Unit - normally a ship, a barge or a semisubmersible, equipped for the construction and maintenance of fixed installations. May sometimes offer accommodation. Other services offered are: Storage facilities, the supply of water, compressed air and electricity, office space, communications centre, helicopter landing pad, etc.
Diving Support Vessel - ship with diving equipment on board, carrying out various types of diving operations. May also be equipped with remotely operated or controlled sub-sea robots (Remote Operated Vehicle - ROV).
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Container ship (Cellular)