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International Shipbroking marketplace - The Baltic Exchange & special purpose charters

The Baltic Exchange

London is the hub of the international shipbroking community, and many individual brokers and broking firms are members of the Baltic Exchange, which is a self-regulated shipbroking marketplace. The activities of its members, who are mostly shipowners, cargo interests and shipbrokers, include the matching of bulk ships and bulk cargoes, and the sale and purchase of ships. Baltic Exchange members undertake to abide by a strict code of business practice, enshrined in the famous Baltic motto “Our Word Our Bond”.

The Baltic’s membership includes shipbrokers of all types as well as non-trading individuals such as maritime lawyers, insurers, financiers, classification societies and consultants who wish to mix with key players in the bulkshipping market and take advantage of the Baltic’s facilities. Many operators in the dry and wet bulk trades are members of the Baltic, particularly international commodity traders in grain, oils, seeds and fats.

Market information in various forms published by the Baltic Exchange is internationally recognised and serves as “barometers” of the cost of transporting dry and wet cargoes. Brokers working at the Baltic collect market data from a number of major broking houses around the world, from which five daily indices are built up and published:

• Baltic Panamax Index (BPI);
• Baltic Capesize Index (BCI);
• Baltic Handymax Index (BHMI);
• Baltic Tanker Dirty Index;
• Baltic Tanker Clean Index;

The indices are built up from specifically defined international bulk routes for the particular trades and ship sizes. The three “dry” indices (BPI, BCI and BHMI) are combined to produce the Baltic Dry Index.

About half of the world’s sale and purchase of ships is estimated to be dealt with through firms represented at the Baltic Exchange. Altogether, this international business generates around $2½ billion a year in freight commissions which comprise 5% of the UK’s total invisible earnings. In addition, tens of billions of dollars in chartering costs go through London’s banking system.

For more details visit Baltic Exchange Website:

Nature of special purpose charters in a sales contract between shipwoner and charterer

A special service vessel, such as a heavy lift ship, could be chartered on a general purpose charter party form, e.g. “GENCON”, suitably adapted by the parties, but this would necessitate a large number of amendments and rider clauses. It would therefore be preferable to charter the vessel on a form specific to the type of operation concerned, e.g. BIMCO’s “HEAVYCON” form - the standard transportation contract for heavy and voluminous cargoes.

“SLOTHIRE” is a BIMCO form on which a slot charterer hires a number of container bays on a containership’s sailings, but not the entire cargo capacity.

“TOWCON” is an international ocean towage agreement for a lump sum, used in the professional towage industry.

“TOWHIRE” is an ocean towage agreement for a daily hire rate.

Related articles

Summarized below seagoing cargo ship various employment guide:
  1. Charty party forms

  2. defines the obligations, rights and liabilities of the shipowner and charterer. Recognised standard form (e.g. GENCON, BALTIME, NYPE)
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    Nature of a time charter
    The charterers agree to hire from the shipowner a named vessel, of specified technical characteristics, for an agreed period of time, for the charterer’s purposes subject to agreed restrictions.
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  3. Voyage charter advantages

  4. contract for the carriage by a named vessel of a specified quantity of cargo between named ports or places.
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  5. Terms of Bareboat charter and lease arrangement

  6. The vessel owners put the vessel (without any crew) at the complete disposal of the charterers and pay the capital costs, but (usually) no other costs.
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  7. Seaworthiness of vessel

  8. A vessel must be fit to encounter the “ordinary perils of the sea” (e.g. bad weather) and other incidental risks to which she will be exposed on the voyage..
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  9. International trade terms (INCOTERMS) in sea transportation

  10. INCOTERMS is a set of rules, published by the International Chamber of Commerce, for the uniform interpretation of the most commonly used trade terms used in international trade contracts.
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  11. Money transfer procedure in sea transport

  12. Money transfer system commonly used in overseas trade to enable sellers to obtain early payment, i.e. soon after shipment of the goods.
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  13. Contract between cargo seller and buyer

  14. The contract of sale between the seller and the buyer of the goods is separate from the contract of carriage which one party or the other, or a third party (such as a freight forwarder), will make with the carrier .
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  15. Parties involved in sea transportation of goods

  16. Forming links in the transport chain- Sea carrier, Freight forwarder, shipper, consignee,agent & banks
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  17. Carriage of goods by sea act 1992 (COGSA 92)

  18. Section 3 of COGSA 92 lays down guidelines establishing when liabilities under a bill of lading, sea waybill or ship’s delivery order will be transferred to a party who is not an original party to the contract of carriage (i.e. an endorsee or transferee). The party who takes or demands delivery of the goods to which a bill of lading, sea waybill or ship’s delivery order relate becomes subject to the same liabilities as the original shipper..
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  19. Laytime interpretation rules

  20. Rules, which were issued jointly by BIMCO, CMI, FONASBA and INTERCARGO, replace the Charter party Laytime Definitions 1980.
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  21. CIF ( Cost, Insurance and Freight ) used in international trade terms (INCOTERMS)

  22. “CIF” means Cost, Insurance and Freight (paid to a named place), e.g. CIF London.- is a contract based on the discharge port
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  23. FOB ( free on board ) used in international trade terms (INCOTERMS)

  24. “FOB” means Free On Board (named port of shipment), e.g. “FOB Newcastle NSW”. It is one of the most commonly used term (INCOTERMS) in sales contracts involving sea transportation of goods.
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  25. Ships employment baltic exchange

  26. Baltic Exchange members undertake to abide by a strict code of business practice, enshrined in the famous Baltic motto “Our Word Our Bond”.
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  27. Ships charter market place

  28. Most ships employed in the charter markets are dry bulk carriers, tankers, combination carriers (e.g. OBOs), or reefer vessels, although there is also a charter market for container ships and for vessels of various special purpose types
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  29. Common Chartering abbreviations

  30. Many terms commonly used by shipbrokers and others involved in ship chartering, mainly to save time and effort in communications. Shipmasters may come across many of the acronyms and abbreviations in documents relating to charters, e.g. in telexed voyage orders and market reports..
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  31. Tanker freight worldscale

  32. "Worldscale" is the code name for the “New Worldwide Tanker Nominal Freight Scale”, published by the Worldscale Association (London) Limited and the Worldscale Association (NYC) Inc
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