Maritime Economic and Shipbroking Samples †MyAssignmenthelp.com

Question: Discuss about theMaritime Economic and Shipbroking. Answer: Descriptive study of demolish con 2011 Ship valuation or appraisals are normally valuations issued by firms dealing with shipbroking who have plenty of experience in the ship market and ship sales. These valuations are normally in the form of a simple letter consisting of few lines or sentences or alternatively use of a detailed certificate that consists of more particulars with details of the vessel as well as the valuer s disclaimer. The letter and the detailed certificate are viewed as tools for professional expression of opinion. The demolition value of a ship is usually based on the lightweight of the vessel and the demolition price in the market per the vessels lightweight ton. The demolition prices are important as they help in determining the vessels final residual value. A valuer who deals with selling and marketing of old vessels, uses this demolition prices aspect to enable him to determine the vessels lightweight. The valuer of older vessels will also be able to determine the ultimate residual value of a vesse l and pick on prices offered for those ships under demolition yard in several parts of the world. The cost of delivering a vessel to the demolition yard is reached at after the demolition value net. This value is normally under certain circumstances viewed as the lowest value of a vessel at one time. Using these value aspects of a vessel, a valuer is able to determine and analyses on the possibility of further trading and market potential of the vessel. The opposite of demolition value is the new building value or prices. Newbuilding prices offer a guideline for a valuer to view modern tonnage in relation to the replacement cost of a vessel. However, it is not true to say that the contract price of a vessel will determine the second-hand value of that vessel on the day it is delivered. The value of the newbuilding can still go up or down at any time unlike during the heady day of the tanker boom where the newbuilding had contracts that were resold at substantial premiums (Stopford 1 997). Demolition price is therefore the vessels ultimate residual value whereby the vessels lightweight and the price offered for their demolition yard are determined by the valuer and apply in various parts of the world. It is possible for a trader to use the demolition value pointers to make sound analysis when determining the market sentiments as well as the trading potential in regards to the demolition value of a vessel. The contract price of an older vessel or a second hand vessel is not dependent on the low value of the vessel on the day it is delivered. The vessel however, whether old or new building, should be in good sea-worthy condition at all times so as to make it credible and the valuer work in marketing and trading of the vessel easier. Demolition value is majorly based on the vessels lightweight and current demolition market prices per lightweight ton of the vessel. Ship valuation Ship valuations are normally issued by shipbroking firms who possess enough experience on matters dealing with ship sale and ship market. Several persons require ship valuations for different reasons. One of them is the bank where they use the valuations for assessing loan offer where they can propose or make and also in monitoring of their financial exposure regarding the market value of the vessel. Lawyers on the other hand use ship valuations as evidence whenever there is a legal dispute or quantum claim. Insurance and the PI clubs for the purposes of market value of the vessels establishment. The ship owners also require the ship valuation so as to issue to insurers and bankers whenever necessary as well as for internal management information regarding assessment of buying and selling of the vessels. Ship valuation is essentially market valuation on market indicators dealing with sales of similar vessels and other necessary general market activities. Market valuation is important as it is based on assumption that the vessel is sea-worthy and in good condition, well maintained, devoid of damages, sufficiently equipped and transferable. A ships value is determined by future projections on its ability to earn and these projections are what bankers use when lending money to borrowers to see if there is prediction of future earnings from the vessel. Formerly, valuations were underpriced, however, recently the shipping industry has restructured its pricing to become befitting in terms of expertise and responsibilities. The difference between ship valuations and other forms of valuations is the notable fact that in most cases ship valuers do not inspect the ship and instead go by the assumption that the vessel should be in good condition and free of charter. The valuer depends mostly on paper description of the vessel issued by the party commissioning the vessel to determine its valuation. According to Ship sale and purchase (2006), ship valuation is also done whe never a deal of sale is being made between a willing seller and a willing buyer hence reflecting the gross price payable by the buyer before deductions and delivery costs that is the responsibility of the seller. Other factors that are considered during ship valuation are such as quantitative factors whereby the valuer determines the quantitative attributes of a vessel in terms of tonnage, speed, cargo, dimension and also the age of the vessel. The valuer also looks at the value of the vessel in term of worthiness as younger vessels are worthy than older ones and larger vessels valuable than smaller ones. The valuer looks at the qualitative factor of a vessel by issuing a valuation of the vessel in terms of being in good condition and seaworthy as well as being charter free. The valuer considers various factors for valuation of the ship such as; cubic capacity, gear capacity, survey position, boat capacity, flag of registry among other important factors. Valuations are opinions give n in good faith by a valuer based on information acquired at that time. One valuation opinion is never enough and a valuer should consider several valuation opinions to avoid incorrect management decision making. References Ship sale and purchase. (2006). London: Witherbys. Stopford, M. (1997). Maritime economics. New York: Routledge.