The Shipbroking Function and Market Efficiency

Siri Strandenes

Maritime Economics & Logistics, 2000, vol. 2, issue 1, 17-26

Abstract: Shipping uses brokers extensively. Shipbrokers typically act as intermediaries matching sellers and buyers of vessels or transport services. This paper analyses the characteristics of shipbrokers' contribution to market efficiency. Shipbrokers mainly contribute by a) speeding up search and matching, b) obtaining favourable ask/bid prices, and c) functioning as experts in deals with asymmetric information. Findings of this paper point out that efficient search and matching are important in spot freight markets. Quality assessments are more important in secondhand and in timecharter markets. Shipowners who opt for an exclusive shipbroker, face higher switching costs. Such binding may bias the freight rate towards the charterer and the secondhand value towards the buyer.International Journal of Maritime Economics (2000) 2, 17–26; doi:10.1057/ijme.2000.1

Date: 2000
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