Assessment of Shippers and Ship Owners Ship and Charter Type Choice in the Wet and Dry Bulk Ship Brokering Market: Knowledge Guide for African Indigenous Ship Brokers

Abstract

Abstract The study assessed shippers and ship owners’ ship and charter party type choices in the wet and dry bulk ship broking and chartering market as guide for performance improvement for African and Nigerian ship brokers. It aims to determine if significant differences exists between shippers ship type choices among Very Large Crude Carriers (VLCC), Handymax, Supramax and capsize vessels in the wet and dry bulk market as well shippers and ship owners charter party type choice between voyage charter and time charter for the various ship types. The study adopted a survey method in which the Baltic International Maritime Council (BIMCO) was surveyed and 5 year data on ship types and charter party type choices of shippers and ship owners was obtained. The statistical tools of Analysis of Variance (ANOVA) and independent sample t-test were used to compare the ship type choices and charter party type choices of shippers and ship owners. The result indicates that shippers’ in the wet and dry bulk cargo market show greater preference for Supramax vessel type. The aggregate number of vessels chartered over the period covered in the study is 41,684 vessels out of which 22,593 representing about 54.2% are Supramax. This was seconded by VLCC which recorded 8,829 or 21.2% charters. Capsize and Handymax vessel types had 6211 and 4069 charters respectively which represent 14.9% and 9.77% each. Shippers and ship owners also show greater preference for voyage charter party type than time charter party for all types of vessels. It was recommended that ship brokers should place greater priority on trading in Supramax ship types and voyage charter party type as the demand trend for this ship type is likely to remain higher over time; followed by VLCC; while more shippers and ship owners are likely continue to show preference for voyage charter than time charter.