The Evolution of Allied Maritime, Inc.

By Kevin Oates

Ask a charterer or a charterers broker when he is in most demand and invariably he will say when the shipping market is bad. This is because in a strong market owners can more easily find profitable employment for their ships and whether one gets market rates or higher is largely irrelevant because people are making money and that makes the happy.

In a weak market, not only do cargoes become scarce, but rogue charterers emerge tempting owners with above market rates that will never be paid. Compounding the already difficult situation, poor market conditions generally slow down the payment cycles of shippers, charterers and receivers and there are often long delays in the payment of freight and demurrage. As a result, a good charterer, or charterers broker, who performs and efficiently employs ships is normally in great demand.

Looking at this relationship schematically, it could be argued that the chartering cycle is a mirror reflection of the shipping cycle. While the peaks and troughs of the chartering cycle do not match those of the shipping cycle, a case can be made that if one were involved in both chartering and owning, the cycles would compliment each other and the consolidated performance would be stronger.

This is only an excerpt of The Evolution of Allied Maritime, Inc.

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