Hey,

Every ship changes hands for the last time.

By one NGO’s rough estimate, about two-thirds of the ships heading for scrap pass through just three companies. One of them says it has handled more than 5,000 vessels.

That company is GMS, and nobody throws it a party. Nobody throws a party for the person who hauls away your old sofa, either. Until the day you need one.

If you read our orderbook edition, this is the other end of the same pipe. Carriers keep ordering ships. Somebody has to take the old ones.

A cash buyer is not a broker. It is a principal, it buys the ship, takes the risk and sells it on to a recycling yard.

Depending on the deal, the owner is paid in full at handover, “as is, where is”, or gets a deposit and the rest when the ship reaches the yard. Either way, the owner walks away. The cash buyer takes over, new flag, new name, fresh insurance, a crew for the last voyage, the paperwork the yard needs and the choice of which yard.

That last item matters. We will come back to it.

Industry estimates have long put the share of recycled ships sold through cash buyers at 98% or more. Nobody sells a ship for scrap by posting an ad.

GMS started in 1992 in the United States. Its founder, Anil Sharma, was still a university lecturer when he began buying decommissioned U.S. and Russian navy vessels for recycling in the early 1990s. After 27 years in the States, he moved the group’s headquarters to Dubai.

Open the shipping trade press in any given week and you will often find a market report that begins with “according to cash buyer GMS.” That is not an accident. When you sit between every owner and every yard, you see the price before everybody else does. (Sound familiar? See last Sunday’s edition on Clarksons.)

Two weeks ago we said scrapping is at a 20-year low. Now you know who sits at the valve.

In September, yards were hungry and owners were not selling. In Alang, India, home to the world’s largest ship-breaking yard, recycling edged up only modestly in the 2026 fiscal year. High freight earnings and oil prices keep demolition subdued, and big ships are scarce.

For a cash buyer, that is awkward. The business lives on volume and spread, and the spread has never been fat. A GMS executive told a London conference back in 2012 that cash buyers were “not making huge fantastic money.” That was 2012, but it describes the model, thin spreads and a dependence on other people deciding it is time.

Then there is the strange corner of the market.

In May, the U.S. Treasury authorized the sale of four sanctioned vessels linked to the Shamkhani network, and GMS confirmed the deal to The Wall Street Journal. GMS argues that some owners want out of sanctioned trades but cannot sell their blacklisted ships. It had been asking for a general license since the start of the year. It did not get one. It got a license for these four.

The alternative exit, according to The Maritime Executive, is abandoning the ship and its crew, which is happening at record-high rates. Sanctioned ships also sell for scrap at a discount, which makes them attractive steel for breakers.

Whatever you think of sanctions (we are not here for that), the mechanics are worth noticing, a legal exit for a ship nobody can legally sell. Somebody will always build a business there.

Here the story turns. A commentary in The Maritime Executive argues that the cash buyer, not the original owner, is the one who in practice chooses the flag for the final voyage, sets up the offshore structures, obtains the paperwork and picks the yard that takes the ship apart. The Hong Kong Convention, in force since June 26, 2025, regulates the owner, the argument goes, while the cash buyer directs the last voyage. Responsibility, in other words, does not follow control.

On Aug. 14, nine workers died from toxic gas while dismantling the LNG carrier Rasi at a yard in Chattogram, Bangladesh, certified under the convention. The NGO Shipbreaking Platform says shipping databases link the ship’s sale to GMS. The NGO also counts 84 accidents at Bangladeshi yards since the convention took effect, with 15 workers killed, citing The Daily Star.

GMS tells a different story about itself. It says it was the first cash buyer to build a green recycling program with a classification society, Germanischer Lloyd, and that blue-chip owners have visited and approved Alang yards.

Meanwhile, the EU is weighing whether to add two Alang yards that use beaching to its approved list. Shipping groups are pushing for approval. Environmental groups are fighting it.

I am not going to tell you who is right. I will tell you this is the part of the business where the answer to “who decides?” matters most.

Three moves, for anyone who buys, sells or handles assets in this industry.

Price the exit before you price the entry. Residual value belongs in the first spreadsheet, not the last. Every ship ever ordered has a last owner somewhere down the line.

Follow the person who decides, not the one who signs. In this business, the seller signs and the cash buyer decides. In your own chain, ask who really chooses the last mile: the subcontractor, the yard, the port. Responsibility that does not follow control tends to end up somewhere inconvenient.

Read the quiet. When the people who live on volume say volume is gone, listen. A cash buyer’s report is not neutral (it is a sales document with numbers in it), but it tends to be early.

Every asset in this industry has a last owner. Most of us never meet theirs. The professionals who stay indispensable know who it will be before they sign for the first one.

Good question for your next purchase order: who buys this when I am done with it?

Talk soon,

Fer

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