Company Magazine for the Odfjell Group - April 2008

What they actually doShip BrokerBy Hans Christian Rabben and Karl Henrik BergeWorking as ship brokers with Odfjellis both challenging and interesting, involvingmany different tasks and issues.Our job is to sell transportation servicesin the shape of cargo space on the ships,and thereby to ensure that we maximisethe earnings of our shipping activities.Without going into too much detail wewill here describe some of our responsibilities.At Odfjell we have organised the salesactivities, or chartering of the ships aswe call it, by tradelanes. Focusing on ageographical area helps us keeping upto date with what is happening in thefreight market in our particular allocatedarea. Staying in close contact withthe market is one of the key elementsenabling the brokers to perform thejob to the required standard. In orderto make sure we obtain necessary marketinformation and knowledge we arein continual contact with external shipbrokers, customers or charterers as theyare usually called, and our overseas offices.Studying market reports and otherperiodicals is also necessary when youwant to keep up with the market.To optimise the earnings for the shipsin a trade, the brokers set up cargoprogrammes. There are huge variationsto the approach on any voyage,but in the parcel tanker industry weusually build programmes consisting ofmultiple grades of cargoes. Often wehave a sound base of contract cargoesto be loaded and discharged at some ofthe main ports that we frequently call.Combining this base with spot cargoesshould then ideally end up in a voyagegenerating a best possible timecharterresult for the ship. However,before reaching the optimal cargo andport combination, we have to considerand calculate the earnings potential ofmany different possibilities.There is a long process from the initialplanning of a voyage until everythinghas been finalised and the books canbe closed. At the early stages of a voyage,often as much as 45 days beforearriving to load, we nominate the vesselto contract customers. Many customerswith whom we have contractsof affreightment (CoA) are producersand have obligations for deliveries ofproduct to their customers. Others aretraders, making their profit through arbitrageopportunities of product pricedifferences between ports. Enteringinto CoAs can be a good strategy for thecustomers, as it helps them plan theirlogistics/shipping requirements at fixedcosts for a certain period. CoAs are alsobeneficial to us as ship-owners, securingstable employment and freight income.Contract volumes form the backbone ofour service along many tradelanes.During the nomination processes wealso start looking for possible spot car-From the Odfjell Chartering department in Bergen26 Odfjell Quarterly April 2008