worldscale

Worldscale is a standardized reference system used in the tanker shipping market to price crude oil and petroleum product voyages. It expresses the cost of moving a unit of cargo between two ports as a multiple of a baseline voyage, known as Worldscale 100. The figures are published for thousands of route pairs by the Worldscale Association (WSA) and are used in voyage charters as the starting point for negotiations. A Worldscale number provides a relative measure of voyage cost, with values above 100 indicating more expensive routes and values below 100 indicating cheaper ones, under a set of standard assumptions.

Originating in the mid-20th century, Worldscale was developed through collaboration among shipowners, charterers, and brokers to streamline and standardize tanker voyage pricing. The Worldscale Association administers the index, periodically updating route numbers to reflect changes in operating costs such as fuel, canal tolls, port charges, insurance, and crew costs. The system relies on a reference vessel and standard conditions, allowing market participants to compare routes and vessel options on a common footing.

In practice, a voyage quote consists of the WS figure for the route plus adjustments or supplements for factors not captured in the baseline, such as bunkers (fuel) differentials, cargo type, vessel size, currency fluctuations, port calls, and special risks. The WS number serves as a benchmark in negotiations and is commonly used in crude oil and refined product chartering.

Limitations include its nature as a benchmark rather than a fixed price. Real-time market conditions, vessel availability, and individual contract terms can lead to deviations from the published Worldscale figures, with additional charges or deductions applied as needed.