What is Shipbroking? Definition and Example
What is ShipbrokingShipbroking is an activity of giving negotiating service between a ship owner and a business owner. The person doing shipbroking or the agent is often called shipbroker. Shipbroking service is always needed because the most common way of delivering goods from one country to another, especially between intercontinental countries, is by ship.
The basic service given by shipbroking agent is to acting as the intermediary between the owner of the ship and business owners who want to transport the products or goods using the ship. The shipbroker is going to be the one dealing with paperwork and regulations, so the goods can be transported or shipped properly.
Shipbroking DefinitionBy the simplest term, the definition of shipbroking is an activity of giving intermediary service between someone who owns a ship and the parties who own a business. If the business owners wish to have the goods shipped overseas, they can contact the shipbroking agent. The agent is going to contact the owner of the ship.
What Does a Shipbroking Do? ExampleThere are several important things that a shipbroking agent or a shipbroker must do in order to get the job done properly. Some of their most important jobs are:
1. Obtaining Permits and Legal StuffThey are going to take care of legal stuff, such as drawing up contracts, establishing method of payment, and obtaining permits, of course. This is a difficult task to handle. That is why the shipbrokers must be those familiar enough with legal paperwork and stuff like taxes.
2. Taking Care of the InsuranceThe goods being shipped in the cargo can be really valuable. Therefore, it is going to be so reckless if the goods are not protected by insurance. This is also the job of shipbroker agent to provide insurance for the goods.
Here is an example of the usage of a shipbroking service. A clothing company from Canada wants to send their goods to their agency in the UK. They choose the transportation by sea to send the products. They then go to a shipbroking company, informing that they will like to use a ship cargo to do the product shipment.
The shipbroking company then contacts a ship owner on the dock, making a deal with them about the shipment and then establishing a contract, including about the payment and fee for the shipbroking service. Both parties sign the contract and the goods are transported immediately after.
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