Advice Concerning the Starting of a Tramp Shipping Company

Hi All,

I have been interested in the tramp shipping business for some time now and have been looking into the feasibility of creating my own tramp shipping company. I have already purchased and read a number of books on the subject, from the standpoint of the business owner. I have no experience in shipping, the only knowledge I have so far is from the various books I have read.

Based on what I have read and from my limited understanding so far, I would first need to start a company, secure financing from a bank, preferably a maritime bank and purchase a relatively low cost ship in reasonable condition, either container or bulk. I would imagine that securing finance would be the most difficult hurdle to overcome. I also assume that as the business owner I may need some technical knowledge on the operation of such ships even with a crew operating the ship.

Any advice or suggestions on the topic would be appreciated.

Thanks in advance.

Fraqrat, is that you chumming the forum again.

1 Like

[QUOTE=Vaughan;194077]Hi All,

I have been interested in the tramp shipping business for some time now and have been looking into the feasibility of creating my own tramp shipping company. I have already purchased and read a number of books on the subject, from the standpoint of the business owner. I have no experience in shipping, the only knowledge I have so far is from the various books I have read.

Based on what I have read and from my limited understanding so far, I would first need to start a company, secure financing from a bank, preferably a maritime bank and purchase a relatively low cost ship in reasonable condition, either container or bulk. I would imagine that securing finance would be the most difficult hurdle to overcome. I also assume that as the business owner I may need some technical knowledge on the operation of such ships even with a crew operating the ship.

Any advice or suggestions on the topic would be appreciated.

Thanks in advance.[/QUOTE]

My advice is to figure out how you can serve the market and provide some advantage for working with you v. other providers.

Once you figure out how to do that economically, then take the next step.

It’s all in the numbers. The field you must play on shifts with the vagaries of macro and micro-economics, government policies and trade patterns.

To be honest, it is pretty clear offshore services, the container and dry bulk trades are thoroughly in the toilet right now.

From a viewpoint that includes NYC, London, Hamburg, Athens and Singapore, the numbers aren’t working for even the most experienced and well resourced players, and any trade press or conference you can find will confirm exactly that.

[QUOTE=+A465B;194079]My advice is to figure out how you can serve the market and provide some advantage for working with you v. other providers.

Once you figure out how to do that economically, then take the next step.

It’s all in the numbers. The field you must play on shifts with the vagaries of macro and micro-economics, government policies and trade patterns.

To be honest, it is pretty clear offshore services, the container and dry bulk trades are thoroughly in the toilet right now.

From a viewpoint that includes NYC, London, Hamburg, Athens and Singapore, the numbers aren’t working for even the most experienced and well resourced players, and any trade press or conference you can find will confirm exactly that.[/QUOTE]

Vaughn,
Provided you are not just chumming for a violent response with a question which, on its face, seems incredibly naive:
To further what +A465B says:
I’m anything but a shipping tycoon, but I do know a little about the business-end of a tramp trade. Rather than looking at it from the lens of wanting to start a tramp shipping business, it would more realistic if you looked at it this way:

  1. Loans…well, what do you have for collateral against a $5 million loan? With enough capital almost anything can be attempted, as long as you have the money to hire the experts to run things for you. Bu you need the capital to begin with.
  2. You’re looking for a niche shipping trade somewhere that is underutilized by other shipping businesses. Shipping is a cut-throat business. Going against established companies in a down market on their home turf would be fruitless.
  3. You need to make yourself an expert in that trade. Profit margins, even in good times, can be razor thin. Make a rookie mistake and you’ll go backwards in a hurry. Knowledge of your trade and would-be customers is everything.For example, if you’re dealing with the South Koreans you better get our money up front. It’s not that South Koreans are evil, it’s just a commercial norm with them. If you don’t demand the money up front, don’t blame them if you don’t see it for a year, or two. That’s one a myriad things you’d best know ahead of time when dealing with would be customers. Cargo brokers can get you cargo, but they might not be a font of knowledge dealing with the customers.
    3)The best thing you can do is find a downsized CEO/VP of Traffic of a shipping company in the niche you’re looking at, and have him provide the consultation, or sign on with you as a VP of Traffic. I know firsthand of a company that did something like that recently and it worked out very well.
    But first you need a mountain of capital…

Sir I will have you know my troll accounts all have way better names and avatars.

Geez gimme some credit!

first you NEED to hire this guy

because HE wrote the book on everything you don’t know

and together you can buy this fine ship here

and soon as you can say “presto, chango, the magnificent Maximo” you’ll be in the stolen bicycle export business headquartered on the Miami River serving exotic foreign lands that look like this

and in a dozen or so years of ceaseless toil and relentless heartbreak you’ll be rolling in the pennies like this happy fellow here

enjoy the ride…

.

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I had no intention of ‘chumming’ or to antagonize anyone into providing a violent response. I asked the question in good faith in order to learn from the experience of others, but thanks for the responses anyway.

[QUOTE=Vaughan;194077]I have no experience in shipping, the only knowledge I have so far is from the various books I have read.

I also assume that as the business owner I may need some technical knowledge on the operation of such ships even with a crew operating the ship.[/QUOTE]

That would be wise.

There’s good money to be made as a US flag ship owner moving tramp cargo for the US government. I can’t say whether the market can bear another operator though.

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This is a great thread. c.captain. Hope all is well. Say hello from time to time would ya? What’s up you fell in love again? Please Note: I am asking these questions for a friend.

hello and not to worry, all is very well here however no new lustlife for me…only business which is up and down (moving up again thankfully)

DAUNTLESS is still waiting for her first job but I endeavor to persevere…

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My dream…small (<100m) general cargo ship, running Port Ev/Miami to Cuba. Guyabera shirts for “uniforms”, a humidor in the wheelhouse, and a secretary that looks like Sofia Vergara…US consumer goods south, classic cars north.

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Geez what are you smokin out of that humidor? But uh you might be onto something.

Buy a foreign built cargo vessel, flag it Panamanian, and hire foreigners. I expect that’s the only way to be economical on that run.

Before everything went in the can in the GoM, there were mid-watch conversations over this…we had found a 98m con-ro, 10mt/ day at 12kts, three years left on her documents, Belize flag. Heck, I even went so far as to make up fliers for “Windmere Shipping” as a nod to Hemingway’s family cottage in NW Michigan (being a Michigander myself) and came up with a half-cooked schedule, rotation for the “owners” who were all shipmates, too. We figured on our off time we would work a week on the boat as either chief or captain and then spend another week in the office. If we employed Cubans as the balance of the crew we were “hoping” to get favorable treatment for starting the line…oh, the things you can think of while sipping coffee early in the morning at sea!

You should have done it before the economy went to shit.

Vaughan, you can easily make a million dollars the first couple of weeks as a tramp ship owner/operator, provided you start with $5 million!
But seriously, I wrote a book called: “Commercial Management in Shipping” geared towards people wanting to learn the ins & outs of shipping. Unfortunately the book has sold out…Good luck, but you better wait a few years till shipping is back into the upswing. Right now the only people making tons of money off shipping are the bankruptcy lawyers.

SW Michigan now…but I’d live in a 20’ camper by the dock on the Miami River if this pipe dream ever worked. Ah, well.I’d miss the upland bird and waterfowl hunting if I lived down south. Duck season isn’t any fun unless there is freezing rain.

I’m really just a boat mechanic and not familarz with white collar stuff like that, but I heard the new thing or ideas that are bubbling about have to do with offshore wind . I heard they need boats for that stuff or something like that. Maybe learn how to tap into that that market. Also: drugs always need to be transported.

This is the only guy that has all the answers.