In a vessel deal the lowest offer does not always win, and the highest does not always pay best. Here is what you should know before you sit down at the table, how to choose your number, and why you should never give a concession away for free.
Most failed negotiations in the vessel market do not fail over price; they fail because one side was not prepared. The buyer has one figure in mind, the seller has another, and neither knows exactly what their alternative is if the deal falls through. The result is either a deadlock or an agreement that one side regrets later. These rules hold for the sale and purchase of ships (S&P) and for chartering alike.
Know your baseline before you negotiate
The first question before any negotiation is this: if I do not reach agreement, what is my best alternative, and what does it earn me? For a tug buyer, that alternative may be another similar vessel on the market. For an owner chartering out their vessel, it may be another charterer, or simply carrying on with the current contract. A negotiation only makes sense if the agreement is better than this baseline for at least one side, and ideally for both.
Ask the same question about the other party. Before the meeting, understand their strengths and weaknesses, their track record and their priorities, and remember that the priorities of the two sides are rarely the same. A seller who needs cash quickly cares about speed of settlement, not just the final figure. A charterer whose project has a tight schedule will pay more to have the vessel ready on a fixed date.
The best offer is neither the cheapest nor the most expensive
A common mistake is for each side to look only at the figure on paper. The real value of any offer has two parts: the amount, and the likelihood that the other side will accept it. An offer that looks very profitable on paper but is unlikely to be accepted earns less in practice than a more moderate offer that is likely to be accepted. Research on negotiations between suppliers and customers shows the same pattern: the lowest price did not produce the best outcome, because its chance of acceptance was low.
The other side's alternative also sets your price ceiling. Once your offer rises above the price of comparable vessels, or above competitors' freight rates, the other side will move to their alternative, however good your vessel is. So test your number against real listings and real market prices before you announce it.
When an offer reaches you, judge it by two measures: how much better it is than your baseline, and how likely it is to materialise. An offer that is slightly better but certain is often worth more than an optimistic one with uncertain payment.
Collect offers with one identical enquiry
If you are a buyer or charterer, send the Request for Quotation (RFQ) to all parties with identical specifications and terms: vessel type, main particulars, port, date, duration and payment method. Only then are the offers genuinely comparable. From there, the negotiation moves through the Firm Offer and the Counter Offer, and whatever remains is recorded as open Subjects, so it is clear what is still not final.
Check technical claims against documents, not brochures. Even in official sources that introduce builders and yards, the founding year or the capacity of a vessel sometimes appears in two different versions. A negotiation built on a wrong figure will not produce the right result, however skilfully it is run.
Do not give concessions for free
Every concession you make, whether a price reduction, extra equipment or payment terms, should be given in return for something. Do not reveal even the concessions you have prepared in advance all at once. In vessel sales, a price or commission reduction is usually tied to a commitment such as a quick decision, earlier payment or delivery on a fixed date. This preserves the value of the concession and also tests how serious the other side is.
When the other side finds the vessel expensive and there is only one option on the table, do not keep cutting the price. Create a new option instead: staged payment, a swap or special terms. Asking directly about the buyer's financial capacity helps you design such an offer. At the same time, make clear that you have your own financial policy.
If you are the seller, raise the vessel's minor faults yourself, and early. The buyer will find them in the Pre-purchase Survey anyway; if they hear it from you, their trust is kept, and those faults do not become a larger bargaining lever.
Mistakes that lead to deadlock
- Focusing only on price and ignoring the other side's real problem, such as scheduling or cash flow.
- Announcing a price too early, before you have fully heard the other side's need. In a good conversation, most of the time goes on listening and asking precise questions.
- Failing to correct wrong impressions, which later turn into disputes over the wording of the contract.
- Rushed decisions or emotional reactions at sensitive moments.
- Spending time on a party with no genuine need or financial capacity. A few precise questions about their need and funding will help you spot a serious buyer early.
A “no” from the other side is not always the end of the negotiation; often it means they need more information. And the ability to say no at the right moment is part of your skill. After every negotiation, whether or not it ended in agreement, review it so the same mistakes are not repeated.
Bringing it together
A good negotiation starts with preparation: your own baseline and the other side's, the real market price, and specifications confirmed by documents. Weigh your number against its likelihood of acceptance, send identical enquiries, and give each concession in return for a commitment.
To gauge prices before you negotiate, look at comparable listings on Shipo Market. If you want to sell or charter out your vessel, list it for free, and for the negotiation ahead of you, contact me and my colleagues through consulting.