S & P

The Role of a Sale & Purchase broker (S&P)

Sales and purchase broker (S&P) brokers are a specialized business related to be the shipping companies and ship owners- S&P brokers works as an important intermediary in the sale and purchase of ships.

S & P broker must have knowledge of ships for sale and purchase and their owners.

A S&P broker can be instructed by either a potential buyer or seller of a ship.

If there is a seller, the broker will seek buyers either from his own contacts in both the broking fraternity, or among shipping companies engaged in similar types of ships that might be looking to buy.

Broker instructed by his client to get a ship to go out in the market and use his contacts and knowledge to find a suitable buyer ore sellers at a price that the customer will be willing to pay.

A S&P broker will have a number of ships "on the books" and it is possible that the needs of a potential buyer may be satisfied (in house).

If there are few suitable vessels obviously for sale, the broker who works for a buyer may well use their knowledge and contacts to ask owners of the ships of the type that are required if they could be persuaded to sell.

Thousands of ships change hands every year, even though their prices are extremely subject to the laws of supply and demand.

S & P broker has a picture of the current position in the trade cycle, and though the prices likely to harden, or to fall in the short term.

It is notoriously difficult to establish, and a good S & P broker is a successful analyst and researcher.

Timing is everything and vessel values, while established on a downward track from the new construction price for the remaining scrap 20 years or more after the ship is built, can vary enormously.

In the nineties, when the needs for very large oil carriers were high, a five-year-old ship would cost something in area 30-40 million U.S. dollars.

A few years later, this ship is worth $ 8-12 million.

When a potential deal is in sight, begins work in the S & P broker in earnest. It is the negotiation of terms and conditions to be made.

 Employment of the ship can be a problem with the ship sold with an existing charter, or in some remote part of the world, where the ship will have to be delivered to their new owners.

The terms and conditions will be stipulated in an agreement, and agreements must be made to give the potential buyer to access the ship for an inspection of their investigations.

 There may be a prerequisite for docking so that the water parts of the ship can be inspected, or an agreement that a divers' survey will be enough.

S & P broker can some time also assist clients with mortgage and transfer of the ship itself.

But this is usually arrange by their self and their financial and legal advisers. There is much at stake in the sale of a ship and great professionalism is needed all round.