I was asked over the weekend what I thought were the main attributes of a good Sale and Purchase shipbroker. Now, I have not worked as a shipbroker, though I worked in shipbroking from 2002 to 2018 and I enjoyed a number of successful collaborations with a number of successful shipbrokers. I had the opportunity to observe them up close - closer than I would have liked on some occasions - over many years. I also know that I would not make a great S&P broker. I don't have the psychological antennae the best brokers have and which they employ to sense the slightest weakness that they can use to press home a deal. From a professional perspective, I am less excited by selling than I am by data or education. I can create great content but I am not the world's greatest salesperson. That's all fine because I use my skills to be successful in my chosen line of business which fits my personality.
Enough about why I am not a broker though. Having spent 16 years in shipbroking, working in senior positions with some very successful S&P brokers, here's my take on their vital characteristics. Slightly tongue in cheek perhaps....
1. Patience. There are about 100,000 IMO registered ships, boats and floating structures. About two to four per cent of these change hands each year. Sometimes these are 'paper' deals run by bankers not brokers selling the equity in a ship owning business. Sometimes the business is done direct between buyer and seller using their own in-house negotiators. Sometimes they are 'steel' deals involving a broker. In addition, about 2,500 new assets are ordered each year from shipyards, not always through brokers. About 2,000-3,000 ships get scrapped each year, mostly with a broker involved. The point is, S&P is an illiquid market. A good S&P broker might do three to five deals a year. An average broker might go a year with no deals from time to time.
2. Persistence. Most S&P brokers start by being a junior broker on a desk with more senior brokers. Although brokers claim to have flat managerial structures, there is a clear hierarchy. The top dog gets first dib on the tastiest deals. If they for some reason can't or don't want them, they pass them down the desk. Junior brokers get the hardest customers or spend their time as 'water carriers' assisting more senior brokers, doing paperwork, admin, taking messages, getting the coffees, dry cleaning, running errands. This can last for years.
3. Adhesion. Stick to your customers like glue. You may eventually have a customer list of 30 to 50 ship owners. Some you call weekly, some monthly, some less, until you have a sniff of a deal, when you call them constantly. You keep them abreast of the market (lean on your research desk), report sales, instigate possible opportunities, understand their requirements and aspirations. A client might do one deal every three years on average but you have to keep calling them regularly to get a chance to negotiate that deal on their behalf. Other brokers in other shops are calling them, buying them lunches and dinners, inviting them to parties, introducing them to useful potential counterparties, driving their children from the airport to boarding school. You have to keep up. Understand what makes them tick. Home in on any opportunity and don't let go.
4. Amazing negotiation skills. Some are born negotiators. Others learn the skills. Superstar S&P brokers negotiate everything and have an insatiable desire to win. They will negotiate the weather with you. They will argue, cajole, flatter, undermine and gaslight. They will do what it takes to win the deal. Most will stay within the boundaries of acceptable behaviour but unfortunately malpractice will occur as it does in all trades and professions. One of the best S&P brokers I know, who teaches the practice, says that you cannot be a nice person and be a good S&P broker. Sure, the best S&P brokers are charming but they will sell their sainted grandmothers to get a deal over the line.
5. Market intelligence. This is not the same as being intelligent but having access to market knowledge. A good broker uses their research department not just to send boring weekly reports but to snout out market opportunities and to pitch those to clients. They use the research dept to onboard new customers. They understand the assets at their disposal and they use them. I know a number of shipbrokers who have told me to my face that they don't believe in research, that they don't need research, or that they object to the firm spending money (not investing!) in research. Fine, work for a firm which doesn't employ analysts- there are plenty. In my experience, the best broking firms have the best market intelligence and research.
6. Fortitude. A succesful broker is able to survive on limited sleep, little rest, near constant travel, unfamiliar food eaten at unfamiliar times, disrupted family lives, spoiled holidays, unhappy spouses. Shipbroking is responsible for more divorces than marriages. Most brokers of my acquaintance drink more alcohol than is good for them in the pursuit of business. A good S&P broker has an iron constitution - can go out partying with customers until 2 AM, but still go for a run at 6AM and be on the phone at 7AM.
I concluded that it's a very rewarding life for those who can stick at it. To my knowledge, there aren't many S&P brokers still doing it into their 50s and 60s. I would guess that at least half who work in S&P shipbroking move on before then to do something else, usually in shipping, but sometimes not. I know of people who have gone into commodities, finance, farming, and data. Those departures create the openings for youth to come in and make a career. So if you are young, fit, good with people, live to sell, are keen to travel the world IRL (internet jargon for "In Real Life") and not via MS Teams - and if you can handle your drink or live without it - go for it.
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