The Global Shipbroking Market Is Witnessing Higher Demand than Usual, Owing To the Introduction of New Technologies and Increase in Urbanization

 

Shipbroking is an international financial service, which constitutes a major component of the worldwide shipping market. Shipbrokers are expert negotiators/mediators between ship owners/dealers who use boats to transport goods, or between buyers and vendors of boats. They negotiate and combine buying and selling transactions, and act as the go-between for parties involved in such transactions. In the case of ship purchases, they act as the agent for the buyer and act as a clearinghouse for all related transactions, from the purchase of the ship to its delivery to its payment. For ships that are sold, they are responsible for ensuring prompt payments and delivery. The fees charged by these brokers depend on the size and type of the ship, its age, and its estimated value.

In recent times, there have been various technological advancements in the marine sectors, which has created significant demand in the global shipbroking market. For instance, in April 2020, ABB Ltd, formerly ASEA Brown Boveri, went in a Memorandum of Understanding (MOU) with Hydrogène de France (HDF), which specializes in hydrogen technologies, in order to manufacture a megawatt-scale fuel system jointly. This system will be capable of powering all ocean-going ships and other vessels. Moreover, the increased rate of industrialization and expansion of urbanization is also propelling the existing demand of the global ship broking market.

Most shipbrokers operate in a network or association, with some companies having offices in each town or city. They have to be licensed by the government to operate, though many brokers are self-employed. Brokerages also help to create demand for boats in the market. If the ship is sold, the brokerage firm earns by making a commission on the sale. If a ship is bought, the broker acts as the intermediary and makes a second commission on the successful sale of the ship. Thus, a good brokerage firm helps the customer by providing necessary services and making the ship available at a reasonable price. However, political imbalances and unawareness of the services can act as a hindrance to the growth of the global shipbroking market.

Owing to the growing demand for goods and increase in container traffic across the Asia Pacific, the region is witnessing high demand in the global shipbroking market. For instance, in January 2021, Adani Ports decided to invest in the Colombo Port terminal. The shipbroking market in the North American region, is witnessing steady growth, owing to the rapid growth of trade and volume of exports and imports. Owing to all these factors, in recent times, there have been some significant industrial developments in the global shipbroking market. For instance, in June 2020, Sandia National Laboratories (SNL), Pacific Northwest National Laboratory (PNNL), and National Renewable Energy Laboratory (NREL), together created an open-source software, called Marine and Hydrokinetic Toolkit (MHKiT).