About 5.5 billion tonnes, or 98 per cent of world trade, is carried by sea. This represents a world freight market with a value estimated at more than $120 billion annually, according to Nigel Bell, managing director of Bell Shipping.

"Coal, iron ore and crude oil predominate, along with grain, rice, steel, timber, bauxite, phosphates and refined products of oil. These form the raw materials for the world's economy - fuels for industry and food for people," he said at a recent conference in Dubai entitled Shipping - Meeting the Challenge, organised by the UAE Branch of the Institute of Chartered Shipbrokers in Dubai.

International trade and the prosperity of individual countries is heavily reliant upon the international shipping industry.

Trade and the development of trading relationships revolve around the ability of individual nations to import - and export - their raw materials and consumer goods.

In 1970, some 247 million tonnes of iron ore were transported by sea, 101 million tonnes of coal and 189 million tonnes of grain.

About 33 years later, these volumes have grown to 471 million tonnes of ore, 552 million tonnes of coal and 271 million tonnes of grain.

A recent study by International Financial Services, London, estimated that the maritime services sector - employing almost 14,000 people - generated close to £1 billion in overseas earnings, with Baltic Exchange members contributing an estimated £293 million to the UK economy in 1999.

London's market share comes close to 50 per cent of the tanker and 30-40 per cent of the dry bulk chartering business worldwide, which is being served by around 2,000 brokers operating 24 hours a day. London also ranks as the world's foremost sale and purchase market.

Over half the world's new and second hand tonnage is bought and sold in a market worth $34 billion annually. Shipbroking represents no less than five per cent of the City of London's total earnings from overseas services - a remarkable figure for a market that is neither capital nor employee intensive.

A similar pattern applies to the growth of trade in crude oil and oil products, he told about 150 delegates.

He was speaking on the chartered shipbroking market.

The role of a shipbroker is to act as an intermediary between the two parties to a contract, whether they are shipowners and charterers in the chartering market, or buyers and sellers in the sale and purchase market.

Bell, qualified as a naval architect and with vast knowledge and experience in the field, said: "The broker may be acting particularly for one principal or occasionally as the sole broker between the two contracting parties.

"The shipbroker will be involved in many stages of the deal: presenting the business to potential clients, negotiating the main terms of the fixture or sale, finalising the details of the contract and following the deal through to its conclusion.

"The type of vessels involved can range from coasters carrying a few hundred tonnes to tankers able to lift several hundred thousand tonnes, passenger vessels, oil-rigs or tugs and barges.

"With only a few exceptions, virtually all secondhand purchases are conducted through a broker or brokers, whereas an increasing proportion of new building contracts are negotiated directly between owner and shipyard, as many shipyards now have worldwide representation and marketing teams.

"Although chartering is a regular activity for owners, they will buy and sell vessels on a far less frequent basis. The sale and purchase decision can have long term significance for the owner as market timing is all important in the fluctuating shipping market."

Most of the major shipbroking companies in London, and even many overseas shipping companies, are members of the Baltic Exchange, which is situated in the City of London.

The Baltic acts as a regulatory body for its members and provides a forum for shipping information to circulate among its members.

It is estimated that London's 700 shipbroking companies, many of them small businesses, account for 50 per cent of all tanker and 30-40 per cent of dry bulk chartering business worldwide.

More than half the world's new and second hand tonnage is bought and sold by Baltic members and London based shipbrokers in a market which was estimated to be worth in the region of $34 billion in 2001.

Whilst the owners/sellers save the commission 1.25 per cent of the daily hire or freight or 1 per cent of the sale price, unlike most other professions serving the shipping industry, that is, lawyers and accountants, it should be remembered that brokers work on a 'no cure/ no pay' basis for the principals they serve.

Principals can rely on information regarding market activity, competition etc without having to reveal that they are showing an interest in the particular prospective business.

A world without brokers providing this pool of information would leave owners and charterers commercially exposed to the competition knowing what they are planning.

In order for brokers to be well informed, and to keep their clients equally well informed, they must incur high communication costs which can only be offset by consummating fixtures or sale transactions.

Experienced owners and charterers take full advantage of competent and experienced brokers. Relationships between brokers and clients take a considerable time to develop, being established on reliable, trustworthy advice and service from the broker.

The main focus in the shipbroking business will be increased involvement in the consultancy side of the business.

With clients becoming increasingly professional and demanding, "contract-making, along with a smattering of knowledge, is simply not enough anymore".