Transport Broker


THE TRANSPORT BROKER 

The transport broker is every natural or legal person who, for a remuneration, puts two or more persons in contact with each other, with the aim to mutually conclude a contract of transport and in case he intervenes by the conclusion of the contract, he only does so in the capacity of a representative of his principal. 

In tramping, it is customary that owners (or operators) of one or several ships are badly informed of the goods that are available for transport and conversely, that owners or exporters of goods are not properly informed about the available ships. In this case a transport broker is necessary who will put both parties in contact (the owner and the exporter) with the aim to conclude a mutual transport contract. 

If the owner is the principal of the transport broker, whereby the latter has to find an appropriate cargo for the ship, the transport broker is called “shipbroker”.

 If the opposite occurs, where the exporter is the principal of the transport broker, whereby the latter now has to find an appropriate ship for the goods that have to be carried, the transport broker is called “chartering or freight broker” or “cargo broker”. 

The Shipbroker 

The shipbroker is an intermediary who, in the tramping, takes care of the hiring of a ship either in time charter or in voyage charter.

The shipbroker, who is appointed by an owner, must ensure that the ships from his principal are continuously employed for the highest possible freight. According to the position of the ship, he will look for a suitable cargo, make sure that the ship never sails without cargo and that she never or as little as possible has to sail in ballast to get to her next cargo. To accomplish these goals, the shipbroker has to be perfectly informed about the freight markets and must therefore, rely mainly on his knowledge, experience and public relations, at home as well as abroad. 

Consequently, the shipbroker is not a fixed mandatary like the shipping agent, but an intermediary who brings together two parties or concludes a separate agreement with both. As intermediary, the shipbroker has no responsibilities in the concluded agreement, on condition that his signature on the contract is followed by the reservation “as agent for the owners”.

Often the shipbroker is also called “owner’s broker”. Sometimes he can work for a liner company when they do not want to employ all their ships in the liner trade. 

The Chartering Broker 

The chartering broker (also called freight broker or cargo broker) is the counterpart of the shipbroker. Indeed, where the shipbroker receives one or more ships in consignment for which he has to find cargo, the chartering broker will act the other way round and try to find for his principal, who is the owner of the goods, a suitable ship. This is why a chartering broker is often also called “freight or cargo broker”. 

Just like the shipbroker, the chartering broker is not a fixed mandatary but only an intermediary who brings together two parties or concludes a separate agreement with both. As intermediary he also has no responsibilities in the concluded agreement on condition that his signature is followed by the words “as agent for the charterers”. 

The Sale and Purchase Broker 

The sale and purchase broker is the middleman who mediates in the buying and selling of a ship. As sale and purchase broker he draws up the memorandum of agreement. His signature will be followed by “as sale and purchase broker only” or “as agents only”.

 NOTES 

The activities of the shipping and chartering broker are often exercised by the same office, which means that the transport broker can at one time be shipping broker and at another time be chartering broker or even be both at the same time. 

As broker they draw up the charter party and sign it on behalf of their client, however with the usual reservation. 

For his intervention, the broker receives a remuneration called “brokerage commission”, the amount being stipulated in the charter party. Usually it is a percentage of the freight. 

In the tramping, the shipbroker can also look after the dispatch of the ship. In this case, his assignment is partially equal to this of a shipping agent. 

From the words “as agents for …” following the signature of the broker, we can deduce that the broker in fact acts as an agent for his client. The term agent may therefore not be used only as referring to a dispatcher (such as a liner agent or port agent) but has to be considered in its broadest meaning as being a representative or intermediary who, by order and in name of another person, acts independently. In this context, therefore, the contracts for shipping agents “Standard Liner Agency Agreement” and other similar agreements may be applied to the shipbroker (and also to the chartering broker).