Worldscale
WS
Meaning
Worldscale is the index used to price tanker freight: a route's flat rate is WS 100, and fixtures are agreed as a percentage of it, such as WS 60.
Also written as Worldscale points, New Worldwide Tanker Nominal Freight Scale
Worldscale explained
Each year the Worldscale Association publishes a flat rate in US dollars per tonne for every tanker route, calculated for a standard ship and cost assumptions. That flat rate is WS 100. Owners and charterers then negotiate in points: WS 75 means 75% of the flat rate.
Worldscale lets the market compare rates across routes of different lengths and costs. To turn WS into dollars, multiply the flat rate by the points and by the cargo quantity. Flat rates are licensed data and change every January.
Example
If a route's flat rate were $20.00 per tonne, a fixture at WS 60 would pay $12.00 per tonne. For a 270,000-tonne VLCC cargo that is $3.24 million in freight.
Watch out for
Fixtures are agreed against the flat rate for the year of loading. A cargo fixed in December for January loading uses the new year's flat rate.
Related terms
Flat rate
The flat rate is the Worldscale reference freight in US dollars per tonne for a specific route, equal to WS 100, published once a year.
Freight
Freight is the payment a charterer makes to the owner for carrying cargo under a voyage charter, quoted per tonne, as a lumpsum or in Worldscale.
Last done
Last done is the rate of the most recent comparable fixture on a route, used as the starting point for negotiating the next one.
TCE
TCE (time charter equivalent) converts a voyage's freight into daily earnings: freight minus voyage costs, divided by the days the voyage takes.
Overage
Overage is the extra cargo insurance premium charged when a ship is older than an underwriter's age limit, usually 15 or 20 years.