Business Functions of Cash Buyers of Ships

 In general terms, a ship has a fixed lifespan for about a few decades only and during that period of time, withstands so much of wear and tear that it becomes almost impossible to get it repaired. Actually, the cost of retrofitting of the ship becomes useless as it has to be ultimately sold off to the cash buyer of ships for recycling in a few years.

 

 Therefore, a ship reaches at a final destruction phase when:

·         The ship is used to a level that it isn’t worth to the sea anymore.

·         The repairs made upon the ship aren’t economically viable.

·         The things that are extracted out of ship hold more value than the whole ship.

Usually, when a thing reaches at the end of its life, it is thrown away, but through ship recycling process value-addition can be done through reuse. That is why the cash buyer of ships is into constructive reuse of the vessel.

So, who is a cash buyer?

We can say that a cash buyer is an entity that buys the ship or vessel for cash from their owners and then they deliver it to the ship recyclers. Well, most of the people take the cash buyers as brokers. Well, it isn’t. They are the traders in this field.

What are the business functions that are performed by a cash buyer of ships?

It includes:

·         Sale & purchase of the vessel

·         Financing, that is, taking title of the ship against full payment

·         Conducting market research

·         Evaluation, which is, forecasting future prices, demand/supply factors and other relevant business specific issues

·         Risk management, which is, underwriting market, operational, performance, currency, demand/supply, and various other risks

What are the benefits of having trustworthy and reliable cash buyer of ships to the ship recyclers?

The benefits of having a trustworthy and reliable cash buyer to the ship recyclers are as follows:

·         They own a huge inventory of the vessels that gives the ship recyclers an opportunity of choosing the vessel of their own choice and preference.

·         They have good financial experience that helps them in giving the ship recyclers an opportunity of negotiating the Letters of Credit with them.

·         They have good understanding of the local rules and regulations and also of the processes that helps them in making the delivery free from any issues.

·         They have good understanding of the needs and requirements of the ship recycler.

·         The cash buyer of ships have the ability to forecast the market on the basis of supply and also according to the trends which helps the ship recyclers with the best service.