What is world scale shipping rates?
Worldscale is a unified system of establishing payment of freight rate for a given oil tanker’s cargo. The freight for a given ship and voyage is normally expressed in a percentage of the published rate and is supposed to reflect the freight market demand at the time of fixing.
How world scale trade is determined?
Worldscale is based on an average vessel with average costs earning an average rate. It works on the basis that, using the realistic costs of operating an imaginary standard tanker of “average” size on an “average” 15,000- mile round voyage, the break-even freight rate for that ship on that route can be calculated.
What is a Worldscale flat rate?
Worldscale flat rates are set annually and are used as the basis of some freight markets with trades being made at a differential to them. The flat rates are used to represent underlying shipping costs, rather than supply and demand levels in freight markets.
What is Afra scale?
This is a freight billing system which is composed of the weighted average of independently owned tanker tonnage. AFRA allows an assessment of a freight scale for various size tankers. AFRA can also be relevant to such matters as the calculation of demurrage for tankers.
Why is Worldscale used?
Worldscale is used to calculate freight rates for oil tankers and product carriers. It is a tanker chartering tool, its principle is to provide the ship-owner with the same net return per day irrespective of voyage performed for the Worldscale Standard Vessel at WS100.
What is Worldscale used for?
Worldscale, or “Worldwide Tanker Nominal Freight Scale”, is a point of reference intended to assist the parties trading oil tankers’ cargo to conduct their business. Rates for voyages are calculated in accordance with a standard calculation and revised in accordance with an established procedure.
What does WS mean in tanker rates?
Worldscale (WS) 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.
How is charter equivalent time calculated?
Time charter equivalent is calculated by taking voyage revenues, subtracting voyage expense, including canal, bunker and port costs, and then dividing the total by the round-trip voyage duration in days. It gives shipping companies a tool to measure period-to-period changes.
How does contract of affreightment work?
Contract of Affreightment is an agreement between a charterer and a shipowner, where the shipowner agrees to transport specific number of goods for the charterer at a specified period. Under this agreement, the charterer is obligated to pay the freight whether the goods are ready for shipment or not.
Why is it called Suezmax?
Moving from a famous canal to another one, Suezmax vessels were named by the Suez Canal. They are medium to large-sized ships, featuring a deadweight tonnage (DWT) of around 120,000 and 200,000. This means that some of fully laden supertankers will not be capable of transiting the canal.
How much does a Suezmax tanker cost?
Average prices for VLCCs, suezmax and aframax units at “top tier yards” are estimated at $95m, $63m and $50.5m, respectively. VLCC newbuildings were priced at $88m in 2018, $92m in 2019 and $88m in 2020, the shipbroker assessed.
What is worldscale index?
Worldscale is the market index system used for crude oil and refined product tanker chartering. The worldscale rate is a standardized estimate of the cost of moving a tanker on a given route. Charters are typically quoted and negotiated as a percent of this worldscale rate.
What is the difference between Worldscale 100 and Worldscale 125 prices?
Prices are an agreed upon percentage of the published Worldscale rate, with Worldscale 100 meaning the rate will be the Worldscale published rate, Worldscale 125 would be 125% of the rate and Worldscale 75 would be 75% of the published rate.
What is WS100 or WS100?
In negotiating a price to pay, the above table is referred to as WS100 or 100% of Worldscale. The actual price negotiated between shipowner and charterer can range from 1% to 1000% and is referred to respectively as WS1 to WS1000, depending on how much loss the first is willing to take on that voyage and how much the latter is willing to pay.
What is Worldscale and how does it work?
Worldscale is a unified system of establishing payment of freight rate for a given oil tanker’s cargo. Prices are an agreed upon percentage of the published Worldscale rate, with Worldscale 100 meaning the rate will be the Worldscale published rate, Worldscale 125 would be 125% of the rate and Worldscale 75 would be 75% of the published rate.
