Markets and Pricing Terms
The language of the freight and asset markets: how tanker and dry-bulk freight is quoted, how paper freight is traded, and how ships are bought, valued, ordered and recycled.
Automated Valuation Model (AVM)
A model that estimates a ship’s market value from recent sales of comparable vessels.
Demolition
The sale of a ship at the end of her life for recycling, priced per light displacement tonne (LDT).
Dry Bulk Freight Index
A composite index tracking the average cost of moving major dry-bulk cargoes by sea: a barometer of dry-bulk demand.
Forward Freight Agreement (FFA)
A cash-settled derivative on a freight route that lets owners and charterers hedge or take a view on future freight rates.
Light Displacement Tonnage (LDT)
The weight of the ship herself (steel, machinery and equipment) empty of cargo, fuel and stores; the basis for scrap pricing.
Net Fleet Growth
The change in fleet capacity over a period (newbuilding deliveries minus demolition): the supply side of the freight balance.
Newbuilding
A ship ordered new from a shipyard, and the forward orderbook of such vessels that signals future fleet supply.
Orderbook
The total tonnage on order at shipyards but not yet delivered: the pipeline of future fleet supply.
Sale & Purchase (S&P)
The secondhand market for trading existing ships, and the desk that brokers those transactions.
Worldscale (WS)
A unified index of nominal tanker freight rates that lets the market quote any tanker voyage as a single percentage.
Where these terms show up on The Maritime
About these definitions. Plain-English reference definitions of standard shipping concepts: our own explanations, not legal advice. Each term page opens with the definition, explains how the concept works and links to the desk where The Maritime measures it. The first entry is Automated Valuation Model (AVM).
Glossary last reviewed: .