Ship Sale and Purchase Explained: How Vessels Change Hands

A market distinct from chartering

Sale and purchase (S&P) is the business of buying and selling the vessels themselves, as physical assets, rather than chartering their employment. It is a separate discipline from chartering with its own brokers, its own market cycles, and its own documentation, though many owners and operators are active in both markets.

S&P activity covers secondhand tonnage (the majority of transaction volume), and — separately — newbuilding contracting with shipyards, which follows a substantially different process again given the multi-year construction timeline involved.

The Memorandum of Agreement (MOA)

The standard contract governing a secondhand vessel sale is the Memorandum of Agreement, commonly based on an industry-standard form (such as the Norwegian Saleform), setting out the price, deposit, delivery terms, inspection rights, and the conditions under which either party can withdraw.

• A deposit (commonly around 10% of the purchase price) is typically paid into an agreed escrow arrangement on signing.
• The buyer generally has inspection rights — physical, and often a review of class and survey records — before completing.
• Delivery, final payment and the transfer of ownership and flag registration follow once conditions are satisfied.

Inspection and valuation

Before completing a purchase, buyers typically arrange a physical inspection, and — depending on the vessel's condition and dry-docking history — may require or negotiate around an upcoming survey or dry-docking. Ship valuation, whether formal or informal, weighs the vessel's age, specification, condition, and prevailing secondhand market levels for comparable tonnage.