Glossary

A type of tanker ship suitable for carrying oil. Aframax is a tanker size range defined by Clarksons as between 80,000 and 120,000 dwt.

A voyage with no cargo on board. The purpose of the voyage is to get a ship in position for the next loading port or docking. On voyage, the ship is said to be 'in ballast'.

The hire or lease of a vessel from one company to another (the charterer), which in turn provides crew, bunkers, stores and pays all operating costs.

Minerals and metals, such as lithium, nickel and cobalt, are essential for battery production.

The Baltic and International Maritime Council, otherwise known as BIMCO, is a global trade association for shipowners, ship operators, shipping brokers and other shipping stakeholders involved in the international maritime industry. 

Bunkering is the name given to the process of supplying fuels directly to a ship’s fuel tank. More specifically, biofuel bunkering describes supplying biofuels (i.e. fuels derived from renewable sources such as vegetable oil and organic waste) to a ship.

Biofuels are any type of fuel that is made from biomass or organic waste, for example plant material, animal waste, or algae material. Biofuels also include methane produced from landfill gas and biogas, and hydrogen produced from renewable resources.

In shipping, the term bunkering describes the process of supplying the fuel which is used to power a vessel’s engines and run on-board machinery. Bunkering can also include supplying food and drinking water for crew on-board a vessel. 

A ship's fuel.

Transport of goods between two ports or places located in the same country, often restricted to domestic carriers.

A type of dry bulk cargo ship. Capesize is defined by Clarksons as 100,000 DWT or larger. These ships are too big to use the Panama or Suez canals.

The process of trapping carbon dioxide produced by burning fossil fuels or other chemical or biological processes and storing it in such a way that it is unable to affect the atmosphere, with the aim of mitigating the effects of global warming.

Carbon capture and storage (CCS) describes the process of extracting CO2 from emissions (produced from industrial processes), then transporting it (via ship or pipeline) for permanent storage. 

The term cargo ship covers a number of different vessel types, each with its own shape, size, design and specialist features. Their primary purpose and usage is to transport 'products' (referred to as cargo) rather than people.

Compensated Gross Tonnage.

This unit of measurement was developed for measuring the level of shipbuilding output and is calculated by applying a conversion factor, which reflects the amount of work required to build a ship, to a vessel's gross registered tonnage.

A charter is the name given to the contract / agreement between a shipowner (who owns the vessel) and a charterer (who hires the vessel) regarding the use of that vessel for a specific time period or specific voyage. The specific details of the charter are negotiated, then set out in a formal charter party agreement. When the parties are looking to choose a charter type, it is important they consider their specific needs, such as the type of cargo, frequency of shipments, need for cost predictability, need for flexibility, tolerance for risk and any other preferences they may have.

A charterparty is a maritime contract between a shipowner and a charterer (the hirer) for the charter (hire) of a ship for the carriage of passengers or cargo. Charterparty is a contract of carriage of cargo in the case of employment of a charter boat.

Cargo owner or another person/company who hires a ship.

CIF (Cost, Insurance, and Freight) and FOB (Free On Board) are both shipping terms, used to define the responsibilities and obligations of the buyer and seller when trading goods internationally.

The main difference between CIF and FOB is the point at which responsibility and risk transfer from the seller to the buyer during the transaction. In CIF, this happens at the destination port, whereas in FOB it happens when the goods are loaded onto the vessel at the port of shipment.

A weighted average index of earnings for the main vessel types where the weighting is based on the number of vessels in each fleet sector.

Refined oil products such as naphtha.

COA is a shipping term which stands for Contract of Affreightment. A COA is a legal agreement, made between a shipper/cargo owner and shipping company/carrier to transport goods by sea.

Ship capable of carrying oil or dry bulk cargoes, thereby increasing the productivity of the vessel. Typically termed OBO or Ore/Oiler.

Commissioning Service Operation Vessels (CSOVs) are specially designed, purpose-built ships that are commonly used for various offshore construction activities.

Commodity derivatives are financial tools that allow an investor to invest in a commodity and make a profit without actually owning it. A commodity derivative gets its value from ‘the underlying asset’, meaning its value is based on the physical commodity (e.g. wheat or gold) it represents. 

Naturally occurring substance in oil and gasfields which can be shipped in tankers.

CTVs are robust ships that are specially designed to safely transport personnel between offshore vessels and ports.

Unrefined oil. Also known as petroleum or simply, oil. It is a fossil fuel and therefore a non renewable resource.

Customs clearance is a compulsory process which goods must pass every time they enter or leave a country. Custom clearance procedures are designed to keep global trade flowing smoothly by ensuring that the correct taxes and duties are paid, and regulations are complied with.

The costs of a vessel's technical operation, crewing, insurance and maintenance, but excluding costs of financing.

Money paid to shipowner by charterer, shipper or receiver for failing to complete loading/discharging within time allowed according to charter-party.

Less refined oil products such as fuel oil.

A generic term for the dry bulk market. The dry bulk market transports large, unpacked, homogenous raw materials like iron ore, coal, grain, and cement in bulk carriers.

Unpackaged cargoes such as coal, ore and grain.

A ship carrying general cargoes or sometimes bulk cargo.

To put a vessel into a dry dock for inspection, repair and maintenance. Normally done on a regular basis.

Deadweight ton.

A measure expressed in metric tons (1,000 kg) or long tons (1,016 kg) of a ship's carrying capacity, including bunker oil, fresh water, crew and provisions. This is the most important commercial measure of the capacity.

The energy transition describes the shift away from using energy derived from fossil fuels (e.g. coal and oil) and towards energy generated using alternative renewable fuels (e.g. wind, solar).

Vessels of under 2,500 TEU which distribute containers regionally between hub ports.

A Forward Freight Agreement is a cash contract for differences requiring no physical delivery based on freight rates on standardised trade routes.

Free On Board. Cost of the delivery of goods is the seller's responsibility only up to the port of loading. The freight is paid for by the buyer of the goods.

Forward Order Book represents estimated commissions collectable over the duration of the contract as principal payments fall due. The forward order book is not discounted.

Forward Ship Value Agreement. An FFA based product designed specifically for the sale and purchase market.

A free trade agreement is a mutually-agreed legal pact between two or more nations to make it easier to import and export goods and services between them, resulting in what is known as a free trade zone.

Freight forwarding involves the movement of goods via air, sea, rail and/or road.

The agreed charge for the carriage of cargo expressed per ton(ne) of cargo (also Worldscale in the tanker market) or as a lump sum.

The concept of ‘green shipping’ is a transformative approach aimed at minimising the environmental impact of maritime operations by paving the way for a more sustainable future which prioritises the planet and its people – not just profit. The term green shipping encompasses a range of strategies and technologies, which all share the common goals of reducing carbon emissions, minimising air and water pollution and promoting ecological balance.

Bulk ship size ranges of ships defined by Clarksons as 10-40,000 DWT and 40-60,000 DWT.

International Maritime Organisation: a United Nations agency devoted to shipping.

Incoterms (International Commercial Terms) are shorthand codes for specific details that have been agreed between a buyer and seller.

The International Safety Management Code (ISM Code) is a very important set of international guidelines for the maritime industry that were developed to ensure safety in shipping and to protect the environment.

A Letter of Authorisation (LoA) is used to assign responsibility for specific task(s) in the shipping process to a third party. Letters of Authority are widely used across the shipping industry to delegate responsibility and authorise a third party (e.g. a freight broker, port agent, or other intermediary), to act on the shipper’s behalf when carrying out tasks like negotiating freight rates or receiving cargo.

Large Gas Carrier. A vessel defined by Clarksons as 40,000-60,000 CBM.

Liquified Natural Gas.

Liquefied Petroleum Gas.

Maritime law is a distinct legal framework that sets out the rules and regulations relating to activities taking place in navigable waters. In most countries, maritime law operates separately to other national legal systems.

Mini bulk carriers are a size category of merchant ship designed to transport unpackaged bulk cargo, such as coal, iron ore, sand and gravel.

Memorandum Of Agreement.

Oil, Bulk, Ore carrier (see Combination carrier).

Offshore field development refers to the extraction of oil and gas from below the ocean bed.

Offshore renewable energy is the name given to electricity which is generated using ocean-based resources. Captured out at sea (via wind, wave or tidal or thermal energy), offshore renewable energy is  transformed into electricity using modern technology and supplied back into the power network back onshore.

An offshore wind farm is a facility that generates electricity using wind that blows across the sea.

Offshore wind farms use large numbers of wind turbines to produce electricity. 

Tanker carrying crude oil or refined oil products.

Bulk ship size range defined by Clarksons as 60-100,000 DWT. Strictly speaking the largest ship capable of navigating in the Panama Canal.

Tanker equipped to carry several types of cargo simultaneously.

Platform supply vessels (PSVs) are a key vessel type for offshore industries. In simple terms, you can think of PSVs as a type of support ship. They are specially designed to provide logistic support for oil, gas, wind, and other offshore installations. They are primarily used to transport essential equipment, supplies, and crew to and from offshore projects, which are needed for their safe, efficient, and effective construction, operation, and maintenance.

Operational administration of a vessel once employed.

Tanker that carries refined oil products.

A vessel capable of handling refrigerated cargoes such as meat, fish and fruit.

Regasification is the name given to the process of using heat to convert LNG (liquefied natural gas) from a liquid to a gas, in order to make it easier to transport and distribute.

An abbreviation for roll-on roll-off, describing vessels where vehicles drive onto and off the vessels.

Ship repair and maintenance is a proactive, planned process. It involves regularly inspecting a vessel’s key on-board systems and carrying out any necessary works to ensure these are kept in optimum working condition. This is typically done in port, or at a dry dock.

A person/company who on behalf of shipowner/shipper negotiates a deal for the transportation of cargo at an agreed price. Shipbrokers also act on behalf of shipping companies in negotiating the purchasing and selling of ships, both second-hand tonnage and newbuilding contracts.

The term ‘shipping’ refers to the transport of cargo as a business.

The energy transition describes the move away from using fossil fuel-based energy (e.g. coal and oil) and towards alternative renewable fuels (e.g. wind and solar). It is already influencing a range of industries and everyday processes – from the introduction of electric vehicles on our roads to replacing gas ovens with electric ones in millions of our homes. As pressures build globally to find solutions to moderate climate change, the energy transition will cause fundamental changes to shipping, trade, offshore and energy too.

Tanker carrying oil from offshore fields to terminals.

Broker commission negotiated and invoiced within the same business year.

Short-term contracts for voyage, trip or short-term time charters, normally no longer than three months in duration.

Spot shipping (also known as spot freight or spot-buy freight) is the price offered by a carrier or logistics company to ship freight from one location to another at a specific point in time. It is called spot shipping because the transaction is carried out ‘on the spot’.

A subsea vessel is a specialist type of ship that is purposely designed to carry out underwater operations for offshore energy projects.

A tanker size range defined by Clarksons as 120,000-200,000 DWT.

Twenty foot Equivalent Units. The unit of measurement of a standard twenty-foot-long container.

3PL stands for third-party logistics. 3PL refers to the process of outsourcing fulfilment and logistics to a partner who stores and ships products on behalf of other companies.

An arrangement whereby a shipowner places a crewed ship at a charterer's disposal for a certain period. Freight is customarily paid periodically in advance. The charterer also pays for bunker, port and canal charges.

Gross freight income less voyage costs (bunker, port and canal charges), usually expressed in US$ per day.

Imperial/Metric ton of 2,240 lbs/1,000 kilos (2,204 lbs).

Ultra Large Crude Carrier. Tanker of more than 320,000 DWT.

Bulk carriers are a type of cargo ship. Unlike container ships, bulk vessels are specifically designed to carry large quantities of non-packaged cargo (e.g. coal, grain, and iron ore) over long distances.

Similar to fuel oil.

Very Large Crude Carrier. Tanker between 200,000 and 320,000 DWT.

Very Large Gas Carrier. A vessel defined by Clarksons as more than 60,000 CBM.

The transportation of cargo from port(s) of loading to port(s) of discharge. Payment is normally per ton(ne) of cargo, and the shipowner pays for bunker, port and canal charges.

Costs directly related to a specific voyage (e.g. bunker, port and canal charges).

Generic term for the tanker market.

An international index of freight for tankers. Worldscale is a schedule of freight rates for a standard ship in US dollars per tonne of oil for an array of oil routes. The rates listed in the index are designated as Worldscale Flat or WS100 and are revised annually.