How the business of chartering is evolving

How brokers will evolve, and what owners and charterers will seek out of their broking houses in the years ahead formed much of the debate in the Chartering Spotlight panel at last week’s Geneva Dry summit.

Torbjørn Gjervik, CEO of Norway’s Western Bulk, told delegates he felt the future of chartering would involve people who had good soft skills as well as the capability to process data well.

“The human factor is truly important for the business. The knowledge, no tool is going to substitute that, but the tools are there to facilitate,” argued Michelle Gonzalez, Vale’s head of chartering in Asia.

Jeremy Palin, the CEO of major broking house Arrow, admitted there were still “some bloody awful brokers” about, but the days of the lunching broker were just about over.

“I think as brokers you need to be stronger, fitter, faster than you ever had to be before,” Palin said, arguing that brokers are nowhere near being replaced by technology. Rather, Palin suggested brokers are able to vastly improve what they offer to their principals via very heavily data-driven research from a variety of systems.

Quite so, concurred Christoffer Svard, chief commercial officer at Sea, a charter party and recap management system.

“I think the role of technology and tools are empowering the users. It’s augmenting the service that you can provide to your customer,” Svard said, going on to argue that while AI and large language models are great for processing big quantities of data, they are “absolutely crap” in making decisions.

The session had opened with a discussion on the merits of Clarksons-backed Sea, and the newly formed Ocean Recap, a rival offering recently launched by five brokers, including Arrow.

Arrow’s Palin said Ocean Recap had been created as a result of a perception that Sea was monopolising the charter party space

“We had a situation where, even just as Arrow last year, I think we paid north of $200,000 for Clarksons to produce our charter parties. That gives me very, very serious indigestion,” Palin said, adding: “Ocean Recap is born from the market, by the market, and for the market. We don’t anonymise data, we don’t aggregate data, we just produce charter parties.”

Replying, Svard from Sea maintained that competition is always healthy as long as innovation is driven and leads to positive change, not just trying to repeat and do the same.

Moderator Tim Huxley, a former broker who now runs Hong Kong shipowner Mandarin Shipping, then questioned where all this debate leaves smaller broking outfits.

“I think definitely there is room for for those niche brokers that really build a deep relationship with the customer and know the trade, know their commodity,” said Western Bulk’s Gjervik, who then went on to outline what he was attempting to do with his own workforce.

“We’re trying to prepare the organisation, to create the culture where the tech team is, first of all, listening to the chartering team so that what they’re trying to build is sort of aligned with what the chartering team needs. That’s the first step, and then you need to have a chartering team, which has an open mind for using data,” Gjervik explained.

In his concluding remarks, Palin from Arrow stressed how information is freely available and abundant everywhere.

“The role of a broker is to understand what is pertinent there. Our commodity, our only commodity, is information and our ability to collate that, direct that and advise,” Palin said, noting how there is a more consultative element to what brokers do as a job these days as opposed to just price matching and transacting and fixing ships.

“There is certainly a collaboration that needs to happen between vendors, charterers, operators, owners and brokers in order to drive the innovation in order to ensure that there is also enough money in it to continue to invest and reinvest to build products that can actually ultimately solve problems,” concluded Svard from Sea.