The Baltic is the world’s leading Sale & Purchase market. It is active both in fields of new buildings and second hand tonnage and features strongly in demolition sales.
The second-hand market is particularly significant in terms of value and turnover. A large percentage of this business is transacted via Baltic brokers. It is a general practice in the buying and selling of ships that owners will instruct brokers to place vessels on the market whilst the vessels are engaged in their normal trades. It is therefore an important part of the transactions that inspections and eventually deliveries under a sale contract are co-ordinated with the employment of the vessel.
A standard form of contract - the Norwegian Sale Form - is used in over 80% of transacted business. The latest edition, which was revised in 2012, has also been approved by BIMCO and incorporates further amendments to previous forms particularly with respect to terms applicable to delivery. Many Japanese owners use the Nippon Saleform. Although contrary to the printed Norwegian Sale Form, it is now more usual that vessels are inspected before being negotiated for sale as the value is very much dependent on a vessel's physical condition.
An important part of the purchase is also an inspection of classification records which will show the history of the vessel since it was delivered. The Sale Form deals mainly with price, terms of payment, where and when the vessel is to be delivered, and the seller's obligation towards the status of class certificates, etc. Sale & Purchase also covers the contracting of new ship construction, and a broker's role in this market lies in obtaining the best available shipyard price, payment terms and specification for all types of vessels.
The scrapping of vessels at the end of their commercial life is dealt with by brokers who offer the ships for recycling. Sale & Purchase brokers provide a service to the industry in estimating ships' values, and this is often formally done by way of certificates of valuation which are widely used by owners for insurance and banking requirements.
The Baltic Exchange offers an Escrow service for its Members whereby the deposit is held by it until the sale is completed and authorisation is given to release the money. For this it undertakes extensive Anti-Money Laundering and Client Due Diligence checks.