Friday is Fixing day in Hamburg
Hanseatic Lloyd Brokers

”Malta, prompt, l/c fo” – these abbreviations, confusing for outsiders, appear on Gerd Meißner’s monitor. A brief look at them tells the broker that a ship is currently available in Malta and had loaded fuel oil (fo) as the last cargo on its previous voyage. HLL Brokers in Hamburg receive up to 400 such e-mails as position or cargo lists every day.

Hanseatic Lloyd Brokers work as independent chartering brokers, also for liquid cargo and tankers of different size categories, such as products and chemical tankers of the small handy size class. Gerd Meißner, who is supported in the daily chartering business by Petra Ramcke-Alt, brought the tanker know-how to the HLL Group together with Armin Gerdau. Besides exclusive chartering of several products and chemical tankers of international shipping companies, HLL Brokers work as competitive brokers. They receive offers for cargo and vessels from market actors and then attempt to bring the two together in competition with other chartering brokers.

A new position appears on the screen, a ship that is available on the Black Sea. Gerd Meißner reaches for the telephone and contacts the shipping company. He has a cargo account in his hand; a load of marine diesel fuel is to be shipped from Georgia to Malta. This could be the right ship for him.

People in the tanker shipping market look for vessels to transport diverse products: from crude oil to such products

as gasoline, gas oil and naphtha to base oils for lubricating oil production, medical and technical white oils, IPA (isopropyl alcohol), n-heptanes and n-paraffins, isobutyl alcohols, styrene or also vegetable oils and much more.

The offers come to HLL Brokers via position and cargo lists, usually as e-mails. These lists contain the positions of ships that will become available and are looking for employment. On the other hand, cargo owners look for a matching tanker for their shipment. A broker then tries to coordinate the interests of the two parties. This requires extensive know-how, many years of experience and instinctive feel. The customers of the broker include charterers – dealers as well as oil companies – and shipping companies. A broker has to steer talk to his”own” ships, supply potential customers with all necessary information and changes in the market, provide extensive support and keep himself abreast of developments on the market.

Employment of the tankers

The time charter, a typical form of employment in the container sector, represents an exception in the tanker market, especially in the segment of smaller vessels. Most ships are employed through spot transactions or under contracts. For example, subchartering periods usually lasting one year are fixed for the four products and chemical tankers of the Hanseatic Lloyd Group. In renegotiations for these vessels HLL Brokers compete with other chartering brokers.”We are not alone on the market and the MCT tankers are freely negotiable, even if they are HLL vessels.”

In the oil or products business the voyage charter, i.e. the spot market, otherwise dominates. The shipping company charters its vessel only for one voyage, which sometimes lasts only three to five days. The ship will therefore participate in the market again within a short time. As soon as it is available, it can then immediately accept a new assignment at its current location.

Like the ship in Malta which is offered to Gerd Meißner this Friday.”It is not easy to get an idea of the shipping company’s situation, whether it is compelled to get cargo for its ship by Monday.” During the talk with the shipping company Gerd Meißner attempts to find this out. And he learns that other offers have been submitted for the vessel. This means the shipping company has a choice, which makes the negotiations difficult.

HLL, by contrast, charters out exclusively vessels belonging to the Belgian shipping company Somers, the”MT Equinox” and the”MT Valerie”. Gerd Meißner developed the latter jointly with the shipping company.

A vessel that is equipped with high-quality duplex stainless steel tanks and has ice class 1 A. A sister ship of the”MT Valerie”, i.e. the”MT Moyra”, will be added in September this year. HLL Brokers have arranged a time charter for both ships to the largest chemical operator, Stolt-Nielsen. It currently employs the”MT Valerie” on the route from South Africa to the eastern coast of India for shipment of phosphoric acid, which is used as fertilizer there. The tanker sails consecutively. That means the vessel is loaded on one trip and sails with ballast in the other direction. Occasionally the ship takes on a return load of caustic soda and chemicals from the Persian Gulf for East and South Africa.

For six years the”MT Equinox” sailed for a Polish charterer, transporting crude oil in a shuttle service between Kaliningrad and Gdansk, and is now employed by the same charterer in spot business for dark products. The vessel operates under a short time charter for one to two months in each case before it is renegotiated.”Then the main issue is actually only the rate.”

Knowing what is in demand

”Market reports and daily information from the talks with shipping companies, brokers and shippers show us how rates for individual types of ship are develop-ing.” In contrast to container shipping, freight rates are mainly quoted for smaller tankers and on rare occasions TC rates.

Finding the right vessel for a certain cargo position is not always easy. Anyone who wants to get a ship for transporting bitumen from the Caribbean to Nigeria in the summer, for example, has to look a long time because summer is bitumen season and these special tankers are therefore very much in demand. It is just as difficult for the bidder who wants to ship a load of marine diesel fuel from Georgia to Malta.”Vessels operating on the Black Sea often do not leave the route and only run regionally. This makes it more difficult to find tonnage that leaves a region.”

In addition to time charter and spot market, i.e. charter for a few days or only one voyage, there are also contracts of affreightment (COA). They are concluded with large oil companies or with dealers and stipulate that a certain volume shall be shipped per year in certain lot sizes, which are then spread over the months appropriately. The ships are then called by the charterer according to need, frequently with the option of discharging in different ports. For the shipping company such a contract means a certain employment security. On the other hand, though, it also has to keep its vessels available on call at the appropriate time.

Services inclusive

Once a ship is contracted or a vessel is contracted for a load in the main terms, i.e. a charter has been negotiated, the broker’s work is not over yet. In negotiations that sometimes last a long time details and clauses, the small print, are discussed and agreed upon. Once the contract is concluded, the charterer is notified regularly as to the position of the vessel as well as the loading and discharge times. In addition, HLL Brokers carry out a time calculation to prepare the shipper for any quay dues that may be due. Quay dues are a payment of the charterer to the shipping company in the case that agreed loading and discharge times are exceeded. The service provided by HLL Brokers to their customers includes the operating aspects as well as consulting on documents required and cargo claims.

For placement of cargo the broker receives a commission that is calculated on the basis of gross freight in the case of voyage charter and on the basis of the daily rate in the case of time charter. By the way, the commission is always paid by the shipping company. This is how a broker makes a living. However, „those working in a competitive business also have to learn to live with failure”. It is not always possible to conclude a contract.”If a contract slips through our fingers, we analyse why it didn’t work out. This is also part of the follow-up work: drawing conclusions to be better the next time in order to close the deal.”

A new e-mail with the position list appears on the monitor. Gerd Meißner reaches for the telephone because”Friday is fixing day” and many a shipping company gets weak in spot positions before the weekend.