WorldScale

Question 1

Worldscale

Answer 1

code for “new worldwide nominal freight scale”

the tanker industry’s reference for calculating freight rates

Question 2

Who runs Worldscale?

Answer 2

calculated and maintained by two non-profit associations, both under the control of a Management Committee which consists of senior figures from leading tanker broking companies

New York and London; coordinate with regard to policy/publication

Question 3

Why use Worldscale?

Answer 3

due to the way oil trading works, it is common for cargoes of oil to be bought and sold many times while at sea, especially in volatile market conditions. the cargo owner therefore requires considerable flexibility in their choice of discharge options

Question 4

Important points about Worldscale

Answer 4

1. there is no compulsion to use WS (not mandatory)
2. it is a reference index and does not pretend to protect the user or any particular transaction
3. both parties to a contract are free to negotiate any variation of WS if they so choose

Question 5

How is the WS data put out to members?

Answer 5

the Worldscale Associations in NY and London publish a book each year, which lists over 60,000 rates and distances. the rates are calculated so that after allowing for port, bunker and canal expenses the net dialy revenue to the shipowner is the same for all voyages

published rates = “flat rates” or WS100

Question 6

What are the constants of the WS rates?

Answer 6

1. rates are expressed in US$ per metric ton
2. rates are calculated assuming a round trip voyage from load port(s) to discharge port(s)

Question 7

What are the components of WS rates?

Answer 7

the components of the calculations are:
* vessel dwt
* vessel’s average service speed
* bunker composition