A third and more complex measure of freight rates is Worldscale. The tanker industry
uses this freight rates index as a more convenient way of negotiating the freight rate per
barrel of oil transported on many different routes. The concept was developed during
the Second World War when the British government introduced a schedule of official
freight rates as a basis for paying the owners of requisitioned tankers. The schedule
showed the cost of transporting a cargo of oil on each of the main routes using a standard
12,000 dwt tanker. Owners were paid the rate shown in the schedule or some fraction
of it. The system was adopted by the tanker industry after the war and has been
progressively revised over the years, the last amendment being in January 1989 when
‘New Worldscale’ was introduced.
The Worldscale index is published in a book that is used as the basis for calculating
tanker spot rates. The book shows, for each tanker route, the cost of transporting a tonne
of cargo using the standard vessel on a round voyage. This cost is known as ‘Worldscale
100’. Each year the Worldscale Panel meets in New York (which covers the
Western Hemisphere) and
London (which covers the rest
of the world) and updates the
book. The standard vessel
has, from time to time, been
updated. The one in use in
2007 is shown in Table 5.2.
The Worldscale system makes
it easier for shipowners and
charterers to compare the
earnings of their vessels on
different routes. Suppose
a tanker is available spot (i.e.
waiting for a cargo) in the
Gulf and the owner agrees