International Journal
on Marine Navigation
and Safety of Sea Transportation
Volume 2
Number 3
September 2008
293
E-Chartering Web Based Platforms Between
Success and Failure
G. Batrinca
Constanta Maritime University, Constanta, Romania
ABSTRACT: For many years there is a debate in the shipping industry over the impact of e-chartering web
platforms on small and medium chartering houses. Although a lot of efforts and money have been spent in
developing such platforms, their impact was lower than anticipated and only few of them are still active. This
paper will try to evaluate why such e-chartering systems failed and what would be main requirements for a
successful e-chartering web platform.
1 HOW SHIPBROKING HAS CHANGED OVER
THE LAST 30 YEARS
Fixing ships was a very challenging task 30 years
ago when, due to very limited communication
possibilities, an owner with a ship looking for cargo
in an area far away from his traditional market, could
only see 20-30 possible cargoes from that area and
he had to choose the best out of them, without
knowing that in the market there were much more
cargoes available and even better paying.
Development of e-mail has been seen as a blessing
by many ship brokers, since with only on click their
open positions and open cargoes could be sent to
hundreds of brokers.
Apart from the fact that more and more
shipbrokers were added to the address books, phone
and telex bills were also considerably lower, which
in turn encouraged brokers to put more and more
cargoes on the market, whether they were controlling
them or not. This development radically changed the
tasks of shipbrokers which are now flooded with
hundreds of e-mails which are difficult to evaluate
and are very time consuming. Shipping market is
very conservative and although all parties involved
in chartering agree that sooner or latter most of the
fixtures will be done on trading portals, there is a
considerable resistance to change which is also
fuelled by failure of many web based platforms.
There is a continuous debate about the impact of
web based platforms on shipbrokers earnings, but
this is not taking into consideration the fact that
anyhow the number of transactions done directly
between charterers and shipowners is increasing and
this has nothing to do with e-commerce.
Over the last couple of years number of
transactions done via competitive brokers has also
declined due to spread of e-mail. This trend will
continue and even if there is a risk that owners and
charterers will do most of their fixtures directly it is
hard to believe that charterers, whose prime objec-
tive is to make money from commercial transactions
and not to save brokers commission, will employ
qualified brokers to handle their requirements. Even
if this will happen it means that owners and
charterers will have to employ more brokers to cope
with the new work which can compensate the
eventual loss of jobs from small and medium
shipbroking houses.
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2 SHORT PRESENTATION OF MAIN WEB
BASED PLATFORMS
Over the years there were featured 35 web based
platforms offering e-chartering services and many of
them failed to meet the expectations of the market.
Some portals did not meet the industry's needs, some
had a market and no product, some had a product
and no market, and even those who had a market and
a product had to learn that adoption was not as swift
as all had expected.
One of the reason for failure is that market
participants are not keen to put their ships and
cargoes on a website unless they can see on the same
site all other cargoes and vessels. At this particular
moment there are few websites developed with
financial contribution from various first class ship
operators and charterers, but it is unlikely that this
will continue since other large organisations will
consider that they can do better and develop new
web platforms. Main e-chartering platforms available
today on the market are LevelSeas, Strategic
Software, AXS Marine, GoReefers, Shipping Direct,
Chartering Solutions and Steminorder.
Levelseas (www.levelseas.com) is a subsidiary of
Clarksons and it consists of two modules Levelseas
exchange and Levelseas operations and it is available
to members. LevelSeas’ ambition is to provide
integrated information systems which manage data,
extracted directly from user companies’ systems over
the internet. The main benefits are increased
efficiency, greater transparency, reductions in costs
and reductions in errors. The biggest barrier to usage
of LevelSeas is the offline world; people still need a
lot of convincing about why they should use it. One
of the biggest accelerators to its usage, however, is
the gradual adoption of the internet in other areas of
people’s lives, particularly at home which leads to
people being more comfortable using it in the office.
The fact that it is a Clarksons company makes it hard
to believe that this is the platform that will be the
leader of the market since Clarksons’ competitors
will not feel secure to place their confidential orders
on a platform controlled by them.
Strategic Software (www.stretgic.co.uk) considers
that an essential tool for shipbrokers is to use a good
messaging system. The most useful service Strategic
provide is creating a data network which saves
brokers from all the manual retyping they have to do.
This led to the creation of Strategic IMX, a network
for information sharing, with founder members
Banchero Costa, EA Gibson, Ispat Shipping, JC
O’Keefe, Poten and Partners and Torvald Klaveness
Group.
Baltic Exchange (www.balticexchange.com) has
a long tradition in shipping and the system they
developed is a means for brokers (and also owners
and charterers) to share information about ships and
cargoes, being extremely specific about who they
would like to be able to view their information.
There is a searchable database of all fixtures made.
Although there is no “click to trade” button, already
a number of fixtures have been made as a result of
brokers using the system. There is also a freight
derivatives trading system, which is currently under
testing. Only brokers are allowed to trade on the
system, although principals are able to view the
market.
AMX Marine (www.amxmarine.com) provides
powerful, flexible knowledge tools, tailored to the
specific needs of dry bulk, wet bulk and container
carrier charterers, owners and shipbrokers. The
charging structure depends on how the system is
used. If a broker uses the system, then no charge will
be made directly to the principals, but the brokers
will pay for it. However if two principals negotiate
directly over the system, then AXS considers itself
to be taking the role of a broker and will charge
commission accordingly at 0.75 to 1 per cent of the
transaction.
Shipping Direct (www.shipping-direct.com) is
about to launch an e-chartering system working with
a specific target on short sea shipping. The platform
will make it easy to transport data, simplifying and
automating a lot of systems. It will include an instant
messaging tool. The company is now specifically
focused on the short sea broking since there are a
much greater number of small brokers in the short
sea market and information is also much harder to
come by.
Steminorder (www.steminorder.com) is the web-
site which claims to have the biggest number of
members, but the design and the updating of the
information is far from an acceptable level. Also
very few large owners and charterers are members of
this site which does not put it a good position to
become the leader of the market.
Before we can talk about a global chartering
platform we have to see some mergers and
acquisitions on this market, but it is hard to believe
that something like this will happen in the near
future since most of the web sites are covering their
expenses from subscription fees.
3 STEPS TOWARD A GLOBAL
E-CHARTERING PLATFORM
A global e-chartering platform has to be managed by
a credible independent organisation to ensure that no
company has an advantage over other competitors.
In order to be successful the platform has to start
295
with basic features and to grow step by step based on
clients requirements, as it is hard to believe that
large organisations will leave aside their own
operational and financial applications to use the
online tools.
At first, the web based system should give users
the same freedom they have when they send away
messages with open cargoes and positions and the
main goal should be to reduce the number of e-mails
send and received. Instead of sending out e-mails
users can set up various groups and give permissions
to see open cargoes and open positions. In this way
the other users will not need to read hundreds of
e-mail, but they will have the information available
and they can use the search capabilities of the
platform and find what they need. One other
shortcoming of many e-chartering platforms is that
various ship brokers quote the same cargo with
different commission structures which will make the
result of the search confusing and this should be
avoided by viewing the cargo only once and users
can thereafter decide if they want to see who else is
quoting that cargo.
Sending indications or firm offers should be
easier as there should be standard forms with fields,
check boxes and drop down list boxes. Port agents
may contribute to a central port costs database as
well as parameters of a specific cargo will also flow
directly into an online quick voyage estimator with
integrated distance tables, so users can evaluate a
business much quicker. Negotiations can be recorded
in a secure log file with possibilities of sending out
copies to e-mail system and with automated
recapitulation of all terms agreed.
One important issue will be the charging for the
service, as it is obvious that developing and maintain-
ing a first class service would need considerable
funding. At this moment there is no free e-chartering
platform available, all know platforms either use a
subscription fee or a transaction fee. A transaction fee
would be more appropriate, but the administrators of
the site have no control over the activities performed
on the site by the users and have to count on users
correctness. The main problem of most web based
providers was that they had no funds to sustain the
website for enough time to allow it to generate
income itself and they imposed some subscription
fees which in turn made more and more clients to
run away. Since the website can and will also be
used by shipowners and charterers it appears that a
lot of other service providers (agents, insurers,
shipyards etc.) would be interested to target the
audience and they would be ready to pay for
advertising, which should become that main source
of funding.
It may take several years until the first 10% of all
fixtures are done on the net. Once the critical mass
of 10% is reached, it will develop into a stampede
and merely take perhaps another year, until the
majority of all business is actually traded on the
shipping exchange. Instead of drowning in
information overkill, created by easy e-mail
communication, people will then be able to
specifically look for what they are really interested
in and immediately bid on it. Another year later, it
will be so common, that nobody can afford not
to put their cargoes or ships on the net! Fixtures will
be concluded by electronic negotiations, by matching
and alert systems, managed tenders or real time
reverse auctions.
European Union is studying if bulk shipping
market needs to be regulated in order to avoid
monopolistic practices of many shipowners and ship
operators forming pools and establishing a common
price strategy. An online trading environment can
help industry become even more transparent and
competitive that today.
After completion of each voyage, charterers and
owners can have the opportunity to give a rating,
evaluating the performance of the counter part. After
many such fixtures, the average rating will become
quite representative. In fact it will be a better tool to
judge the standing and performance of an owner or
charterer than the biased opinion of a broker, who’s
prime interest is to fix that piece of business.
Many tools and services that we cannot even
imagine today will be refined and integrated year by
year. Port information, laytime calculations and
various other decision support tools and post fixture
applications will become part of the site. Once
enough traffic is obtained, the market site can
generate its own statistics. Needless to say, maritime
news, fixture reports and market forecast will also
form part of the portal.
Fixing ships and cargoes on web platforms will
not make a better shipping world, but competition
will be fierce and market will be more transparent.
Shipping will also become less personal and more
standardised. Some will hate it, same will like it, but
for sure this development will be inevitable and
nobody can stop it. It will be driven by the
commercial pressures of the global economy and the
desire to become more productive, save costs and
find a better match.
REFERENCES
Batrinca, G. 2003. Digital Economy – Is E-Chartering Only a
Fashion or Will It Revolutionize Shipping Transactions
Altogether?, The Sixth International Conference on
