PNTC COLLEGES

Zone III, Lt. Cantimbuhan St. Poblacion, Dasmariñas City

COLLEGE OF MARITIME EDUCATION

ONLINE DISTANCE LEARNING MODULE

COURSE CODE SHP 304 PRE-REQUISITE NONE

COURSE TITLE Ship Superintendency and Chartering Practice SEMESTER 2nd
UNITS 3 YEAR LEVEL 3rd
COURSE DESCRIPTION
CREATED BY Capt. Edgardo B. Tabunan - Faculty, MT, College of Maritime Education

MODULE 11 (WEEK 11)

Ship Superintendency
SHIP OPERATIONS & MANAGEMENT (Cont.)
Chartering Practice
THE ORGANISATION OF A SHIPPING COMPANY
TOPIC LEARNING OUTCOMES

The students shall be able to:

1. Explain Commercial
2. Explain The Impact of Big Data on Commercial Shipping
3. Explain Ship’s Personnel
4. Explain Accounting
5. Explain The Manager is still an Agent
6. Explain Employment of Agents
7. Explain The Network of Business Connections
8. Explain Organization Chart
9. Explain The shipping and chartering departments

ENGAGE

There has to be very close liaison between the commercial people and the operations department who have to ensure
such things as having the right amounts of bunkers at suitable times and places. Crew changes have to be organized
at the appropriate intervals and careful planning can avoid expensive air travel for the old and new crew members. Is
the Routine dry-docking being another major activity which has to be harmonized with commercial commitments?
Why?

EXPLORE
• Ship Superintendency:

• The Impact of Big Data in Commercial Shipping

Question:

Digitizing the commercial shipping industry can automate key processes, leading to
an enormous potential payoff. At a time when global commercial shipping is at
an all-time low growth rate, predictive analytics and big data could be the
revolution the industry needs to thrive. Can the Fleet managers could take
advantage of billions of pieces of information with the right attention to big data?
How?

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• Chartering Practice
• Networking Intermediation Services
Question:

A bigger organization will normally consist of the head office, the ships,
offices abroad and a network of business connections such as
shipbrokers, agents, stevedores, etc. who frequently are independent
companies with whom the big company has fixed contracts. In your point
of view, would it be favorable for the shipping company to have
connections in world leader in shipping and logistics? Why?

EXPLAIN AND ELABORATE

• Ship Superintendency

SHIP OPERATIONS & MANAGEMENT

LESSON ONE (continuation)
SHIP OWNERS, OPERATORS AND MANAGERS

1. Commercial

Many shipowners sub-contract all the management of their ships with the exception of the actual arranging of the
ships’ commercial activities. Thus the contact with brokers and the fixing of the charters, or in the case of liners the
marketing and documentation, are under the owners’ total control.

There has to be very close liaison between the commercial people and the operations department who have to ensure
such things as having the right amounts of bunkers at suitable times and places. Crew changes have to be organized
at the appropriate intervals and careful planning can avoid expensive air travel for the old and new crew members.
Routine dry-docking is another major activity which has to be harmonized with commercial commitments.

When the management includes the commercial work as well, or in the case of the management being carried out by
the owners themselves, this close liaison between the operations staff and the commercial department is far simpler
and in some companies this has developed into such a close tie that it is difficult to see where the precise divisions
lie. It is the commercial department’s job to decide what business to go for and to authorize the brokers accordingly
but such decisions cannot be made without the certainty that what is proposed is physically and conveniently possible.

Given that a particular piece of business is workable, the commercial people have the task of ensuring that it is as
profitable as possible so that an understanding of the market conditions, much of this learnt from the brokers, is an
essential part of this decision-making. Skill at producing voyage estimates to enable viability and comparison with
other business to be checked is an important part of this.

Each voyage cannot be looked at in isolation, an eye must be kept on where the ship will become empty and what
sort of following business may be available. It could be worth ignoring a cargo nearby and sailing in ballast to a further
port if the business there takes the ship, in turn, to an area where there is the prospect of good following business.

Whilst all the departments in a ship manager’s office are vital, the responsibility for the eventual success of the
venture rests with the commercial department.

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2. The Impact of Big Data on Commercial Shipping

How Big Data Could Reshape Commercial Shipping

The concept of big data – the immeasurable amount of data collected from internet-capable user devices – has
disrupted many traditional business structures. Commercial shipping and trucking are no exceptions. Tasks that used
to be inefficient or even impossible are now achieved easily through digital means. Digitizing the commercial shipping
industry can automate key processes, leading to an enormous potential payoff. At a time when global commercial
shipping is at an all-time low growth rate, predictive analytics and big data could be the revolution the industry needs
to thrive. Fleet managers can take advantage of billions of pieces of information with the right attention to big data.

Big Data in Today’s Shipping Economy

Big data isn’t a new technology – it’s already changed the world’s transportation network. Shipping operators have
analyzed their businesses for decades, looking for pitfalls, losses, and ways to profit. Big data, however, isn’t merely
a new way to analyze business. It’s a facilitator for collecting data points and analyzing them to optimize a fleet
completely. Some managers are already using big data via electronic on-board recorders (EOBRs) and telematics to
gauge information, such as:
 Driver behaviors and performance
 Vehicle data, including tire pressure, cargo status, and reefer monitoring
 Administrative data, such as driver histories
 Warehouse information
 Routing information
 Store point of sale data
 Fuel purchases and amounts
 Cargo temperatures
 Customer interactions
● Operating expenses

Big data is proving crucial to improving vehicle safety, performance, and maintenance, making for faster and more
accurate issue diagnostics. A growing number of sensors on commercial shipping vehicles are improving the quality
of the transportation process. Drivers benefit from big data collected from their interactions and navigation, as it can
optimize their scheduling and shipment routes. Data collected from vehicles, including speed, hard braking, and
acceleration, can provide company averages for customers to use. There is no aspect of commercial shipping that
can’t use big data to its advantage – with the right tools to make use of the information.

Leveraging Big Data in the Shipping Industry

With big data comes great responsibility. The torrent of data industrial equipment creates is massive, presenting
unfathomable opportunities. Harnessing this data demands the development of analytic capabilities and tools to meet
the stringent requirements of interpreting big data and using it to a company’s advantage. In the transportation
industry, fleet managers need the right hardware and software to analyze data created by sensors and telematics.
New platforms must be scalable to take on new opportunities, such as big data solutions like Hadoop. A company
must also focus on data security, technology flexibility, and orchestrating multiple applications at once.

If a commercial shipping manager can master big data in the modern world, he or she will have incredible advantages
and optimization potential. Big data has the power to create valuable new business models, reduce labor costs, and
increase productivity. It can make commercial shipping more efficient and profitable, control fuel costs, and improve
customer service. Big data may be the key to keeping commercial shipping a well-oiled machine for generations to
come.

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3. Ship’s Personnel

Even with first class departments in the ship manager’s office and despite all the technological advances made in this
century, a ship’s eventual success or failure will depend upon its officers and crew. This in turn makes it imperative
for the ship managers to have a well-run crewing department.

Many different, sometimes opposing factors have an influence upon crewing matters the first of which, regardless of
any external pressures is one of safety. Safety, first of all, in its obvious humanitarian sense in not risking the lives of
the people in the ship (or in any other ship with which it might collide). Safety also in material sense in not risking an
enormous financial outlay in the hands of incompetent workers.

Safety will also be dictated from external sources which, in the case of responsible maritime nations, will be in the
form of statutory manning levels where the precise number and competency of the officers and crew will be laid
down according to the size and type of ship and will be enforced by the law of the country of registration.

The flag of registration of the vessel is important because the precise number and competency of the officers and
crew will be laid down according to the size and type of ship and will be enforced by the law of the country of
registration. Crews from some countries are very much cheaper than others, compare wage levels between, for
example The Philippines and Norway, the latter are two and a half times higher. Some maritime countries insist on
the employment of nationals of the flag of registry others, whilst retaining many of the safety aspects of ship manning,
are more relaxed about the nationality of the crew. This has given rise to companies which undertake to provide entire
crews, many such crewing contractors directly supervise the training of the required personnel and ensure that they
are replaced at the appropriate times.

Manning levels will also form part of any labor agreements in countries where trades unions are able to negotiate
imposed standards. These standards are principally dictated with safety of the union’s members in mind although
they may appear at times to err on the side of increasing employment for their members. In the case of the traditional
maritime nations, agreement is usually negotiated between the national union and either the individual owners or
with an association representing all the owners in that country.

Where there is no tradition of shipowning, one may encounter enforced agreements imposed by the International
Transport Workers Federation (ITF) which is a body to which many of the world’s transport unions are affiliated. The
ITF is dedicated to ensuring that shipowners do not exploit seamen from poorer nations by paying them low wages
and placing them in sub-standard ships.

The attention of the ITF is principally directed against those ships which are registered under flags of nations which
have no real maritime tradition and exert very loose control, if any, upon the manning levels or other matters of
crewing competency. These are the so-called flags of convenience and the attraction for shipowners to register under
such flags is a combination of this lack of regulation of personnel with little or no taxation demands upon the earnings
of the owners. These attractions have to be balanced against the risk of attracting the disapproval of such bodies as
the ITF who, through their affiliated national Trades Unions are able to immobilize a ship by the withdrawal of all
shore labor.

As well as actual flags of convenience, some of which have earned a poor reputation, some countries have recognized
that the strictness of their maritime laws might tempt local owners to register their ships abroad. These countries
have, therefore, agreed to the formation of second registers sometimes referred to as open registers.

Belgium, Denmark, France, Germany, Norway, Spain and the United Kingdom all have second registers, many of them
specifically formed as a political decision; in the case of the U.K. the Isle of Man register developed as a result of the
peculiar semiindependence of certain off-shore islands around the British Isles. Several British ships have re-registered
in the Isle of Man because simply avoiding the requirement to deduct and collect Income Tax and Social Security
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payments on behalf of the government has so reduced staff in the crewing department that it can represent the
difference between profit and loss. The shipowner’s decision as to where to register his ships will, therefore, have a
significant effect upon the work of the crewing department.

Open registers whilst retaining many of the safety aspects of ship manning, are more relaxed about the nationality of
the crew. This has given rise to companies which undertake to provide entire crews, many such crewing contractors
directly supervise the training of the required personnel and ensure that they are replaced at the appropriate times.

Some of those U.K. owners who flagged out their ships, actually continue to carry out all their own ship management
in the U.K. with the exception of crewing which is delegated to a management company in the Isle of Man. Several
other countries, such as The Philippines, have built up a strong tradition of crew contracting.

The International Ship Management Code of Practice (ISM Code) is an international convention established by the
International Maritime Organisation (IMO) sets out the minimum levels of training and administration and which has
been adopted by the majority of the maritime nations of the world. Participating counties, as well as insisting upon
their own ships obeying the code are also empowered to demand proof that visiting vessels of other flags are
complying with the standard. This is enforceable under Port State Control.

4. Accounting

There are two good reasons why a clearly defined agreement on accounting procedures is reached between the
owners and the managers. First, is the obvious fact that the owners are not only entrusting to someone else the
management of capital assets probably worth tens of millions of dollars but also allowing that third party to commit
significant sums of money daily in the running of the ships.

Secondly, the shipowners need to know whether or not the sort of business in which the ships are engaging is covering
costs - preferably of course making a profit. Whenever a new piece of business is being contemplated the commercial
department makes a voyage estimate. Which as the name implies is an estimate of the financial outcome of the
voyage(s) or period being considered. To make this estimate three cost areas have to be combined. The first are the
fixed costs which are those that occur whatever the ship is doing, whether it is sailing on a voyage, working in port or
simply laying idle waiting for some business. A major item here would be amortization (or depreciation) which is the
term used to cover the need during the working life of the ship gradually to write off the initial cost of the ship. Very
frequently a ship is paid for with money borrowed from a bank or other financial institution and the cost of the
instalments repaying the loan plus the interest charged by the lender is also essentially a fixed cost.

Then there are operating costs which are only incurred if the ship is active but have to be paid whether the ship is
earning money or not; crews’ wages is a typical operating cost. Fixed costs and operating costs are provided to the
commercial people by the managers so that they have to be able to supply very accurate budgets of all anticipated
expenses which they, or the owners themselves, break down to a cost per day.

This is taken into the calculation of the voyage estimate which in its turn will calculate the voyage costs which will be
those expenses directly resulting from undertaking that voyage such as bunker fuel and port expenses. The voyage
estimate will also provide an estimate of how many days the voyage will occupy, never forgetting to add any distance
which may have to be covered in ballast in order to reach the first loading place. The distance involved divided by the
ship’s average speed will tell how many days at sea and the ship’s fuel consumption will indicate how much fuel will
be used at sea; remember that the ship uses far less fuel when stationary in port. The rates of loading and discharge
will provide an idea of the number of days in port but experience of the trade will make this part of the estimate more
accurate.

One now has a total daily cost figure and an estimated number of days which, multiplied by each other, gives the total
estimated expenses for that particular voyage. The anticipated rate of freight times the number of tonnes (less

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commissions and any loading/discharging costs) will provide a total income for the voyage which one always hopes
will exceed the costs by a substantial amount as this is the gross profit.

Several voyage estimates might be carried out to compare one piece of business with another before entering into
serious negotiations. The outcome of one particular voyage is not the only factor to be considered as one has to have
regard to whether the ship will finish up in a place where nearby following business is available or whether a long
ballast run may be necessary to get to where business can be found.

This is not the end of the accounting dialogue between managers and owners because the actual financial outcome
of the voyage has to be provided to be compared with the original estimate. It is only in this way can a bank of
experience be compiled so that future voyage estimates are more accurate than mere guesses.

5. THE MANAGER IS STILL AN AGENT

It is important to remember that the principal is the shipowner and that the ship manager is his agent. This may
sometimes be difficult for the outside world to see when the only contact the agent or broker has is with the ship
manager. It is not unusual for shipowners with several vessels to register each ship in an individual owning company,
possibly even in different flag states. This is for good accounting or legal reasons and should not necessarily be cause
for concern. The ship manager, who may be part of that shipowner’s organization or may be independent, will look
after the whole fleet.

Unfortunately, but rarely, there are occasions when this can be a problem. The ship manager can plead his agency
relationship with the owner to avoid responsibility for the owner’s debts, when he is actually part of the same
business. The test must always be whether or not the management company has a good reputation and a track record
in the market place.

6. EMPLOYMENT OF AGENTS

Where ever a ship goes in the world it will need an agent at every port of call to make the necessary arrangements
for it to enter and leave that port; to have it discharged or loaded with cargo; to comply with the local regulations and
to pay for services rendered and taxes or dues payable. In theory it is possible for the master to handle all such matters
but except for some small coasters trading on regular routes, it is not practical.

It is usually the ship manager’s responsibility to choose and appoint the port agent. However, it has to be recognized
that many Charterers will wish to nominate the agent to be used by the owner in respect of their business. The reason
for such nomination may be that the charterer wants an agent who has particular experience of the cargo or terminal
used or to protect its commercial confidentiality. Whatever the reason it is a negotiated clause in the charter but it
must be remembered that the ‘nominated’ agent is the agent of the ship, not the charterer.

When a port agent is appointed it is that agent’s responsibility to act at all times in the best interest of the vessel. The
shipowner will need to keep the Agent advised as to a ship's movements and Expected Time of Arrival (ETA). The
agent will know from the schedule when the next vessel is due at his port. The owner and agent will be in constant
communication by telephone, fax or e-mail regarding changes to schedule and all the other anticipated requirements
for the ship.

The ship's Master will also contact the Agent in order to advise the ship's requirements. It is obviously necessary to
give the Agent as much advance warning as possible, although this is not always feasible, as with and emergency due
to damage or illness, for example.

The Agent will contact the ship with any information of which the Master should be aware. Equally, Agents will contact
their opposite numbers in the next port of call, as a ship leaves, to advise the Agent there of any requirements about
which there is not the time or the need to contact the Principal.
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The following is a list of some of the routine matters that are handled by an Agent, before, during and after a ship
calls at his port: -

i) Before arrival Arranging a berth and discussing the cargo handling programme with the terminal
operator/stevedore.

Booking a pilot and tugs. Arranging Customs and Immigration attendance. Arranging for a Doctor to attend, either for
routine matters, such as inoculations, or in respect of illness. Arranging for the delivery of supplies of food, water,
bunkers and stores of all kinds. Preparation of the required ship's papers, eg inward and outward clearance, light and
port dues, etc. Collecting mail for the ship ready to be taken on board. Arranging for a government official or Consular
Officer to be present if crew are to sign on or off. Arranging for transportation to and from airports and railways
stations for crew arriving and leaving.

ii) On arrival The Agent will board the ship immediately on arrival and meet with the Master, Chief Officer and Chief
Engineer Officer to discuss their various requirements. These may consist of: - Arranging for cash to be brought on
board for disbursement to the crew. A large amount of cash may be needed if a crew is to 'sign off'. Arrangements for
crew needing medical or dental treatment to visit a doctor or dentist. Further and more precise details concerning
the cargo work, involving discharge/loading of, for example, livestock, hazardous goods, heavy lifts and valuables.
Arranging for the reporting to the Principal of any details concerning insurance and General Average claims. Arranging
for the attendance of surveyors for either cargo or ship damage, or both.

iii) During the ship's call Daily liaison with the ship's personnel and cargo superintendent on continuing cargo work.
Towards the end of the call, arrange for the signing of Mate's Receipts and Bills of Lading. Payment of bills/invoices
for goods and services supplied to the ship. Frequent and regular communication with the principal concerning the
ship's progress and sailing prospects.

iv) On departure Obtaining from the Master the ETA at the next port, and the ship's requirements on arrival there
which will be sent to these Agents.

v) After departure Advising the Agent at the next port of the ETA and the requirements of the ship on arrival, for
example water and bunker needs - may be urgent after a long voyage. The ship may have to wait at anchor for a berth,
and bunkers, stores and provisions must be delivered by boat.

Any special medical or crew welfare needs should be advised so that there is sufficient time to make the necessary
arrangements.

Having listed all the duties of the appointed agent it will be clear that it will be the responsibility of the ship manager
to instruct the agent in respect of all these matters in a timely manner. It is very important that the any discretion
given to the agent, for example to order overtime or stores, or to advance cash to the Master is clearly set out both
as to the circumstances and the amount of money that can be expended.

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• Chartering Practice

THE ORGANISATION OF A SHIPPING COMPANY

7. THE NETWORK OF BUSINESS CONNECTIONS

A bigger organization will normally consist of the head office, the ships, offices abroad and a network of business
connections such as shipbrokers, agents, stevedores, etc. who frequently are independent companies with whom the
big company has fixed contracts. Bigger liner companies, for instance, will normally operate with a great number of
agents, the same number of stevedore connections as ports called at, and a number of special firms such as
shipbrokers, lawyers, tax consultants and auditors who have standing orders according to agreement. Most shipping
companies prefer to use independent firm’s familiar with the local conditions in each country. Partly because such
firms may already be tied up with a competitor, or difficult to find, and partly because the companies have sizeable
spheres of interest in the areas concerned, they have established their own offices abroad. This is particularly true of
the liner companies. In this way the head office has direct Control of the agents and will, for instance, be able to
expand the offices abroad under its own supervision. In towns of particular importance one may find Owners'
Representatives who have assignments of different kinds.

THE SUPERINTENDANTS

Other kinds of representatives abroad are the superintendents at shipyards which build new ships on contracts.
Inspectors who manage repair and maintenance work, etc. Cargo Superintendents for the liner trade are also quite
usual. In general, there are not many of these representatives sent out from head office, and consequently they
seldom create any organizational problems.

8. ORGANIZATION CHART

The usual aid to showing the pattern of different functions in a shipping company is tide organization chart. Such a
chart is an important means of defining the areas of authority and responsibility and thus of evaluating if the
organization satisfies the demands placed on it. The following chart of an imaginary shipping company shows the
general assembly, the Board of Directors, the shipowner and the various main departments.

THE FUNCTIONS OF THE MAIN DEPARTMENTS

The Legal Department covers a large field. Among the main functions can be mentioned Board matters, contracts for
new buildings, company law, national/international taxes, and purchase/sale of ships. The company lawyer is also
often on the Managing Director's staff, and/or secretary to the Board of Directors. Frequently, this department will
often also handle marine and other insurance matters that may arise of a legal nature.

The Administrative Department is responsible for the main organization, for personnel, internal services and internal
control. Within all these fields a new development has taken place during the last few years. The importance of a
sensible employment policy combined with systematic training has been given increased emphasis. Internal control
covers the traditional auditing as well as the more detailed control work required to ensure that the organization
works according to the policies laid down and within the working instructions given.

The Finance and Accounting Departments cover budgets, accounting, EDP and finance. Regular reports are prepared
for each operational department, each ship and for the company as a whole. The management needs to keep the
Accounting Department up to date with operational proceedings at all times, with changes and corrections when
necessary. Computers have been used for a long time in modern shipping companies and for different purposes.
Computers are indispensable as an advanced technical aid in the office, also for complicated techno/ economic
calculations and for budgeting in the operational and liquidity area. During the last few years long range planning has
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also been taken up as a subject of business administration. The reporting of the economic results should follow the
organization chart and will, if correctly done, be of prime importance to the management, for the organization's mode
of operations and for the control of the results. Financial questions will always be vital to any shipping company. To
arrange finance when building new vessels and to find the highest interest for liquid working capital are main activities
together with follow-up of the unstable currency markets and protection against currency losses.

The Technical and Marine Departments take care of fleet management, including ship operations, manning, storing,
repair and maintenance and dockings. The departments are also usually responsible for building of new ships, often
organized in a new-building section. Project development with optimization studies and operational analysis is done
in cooperation with other departments, mainly the shipping departments. For Project developments EDP is
increasingly becoming a useful tool.

The Marine Insurance and Claims Department handles ship insurance, statistics of damage and makes preparations
for adjustments of claims. All claims relating to damage of the cargo are handled in this department. These claim
adjustments cause considerable work, particularly within the liner trade.

9. The shipping and chartering departments

The Liner Department. From an organizational point of view, it is of interest to observe that the liner trade seldom
operates under the supervision of one company alone. There are many different types of cooperation. In some cases,
the owners put their ships at the disposal of a separate joint venture company which manages the operations. In other
cases, they may participate as partners in a co-sailing agreement, possibly also with a pool agreement. Usually this
takes place within the framework of a liner conference, where all the shipping companies serving the trade in question
participate. No matter how the cooperation is arranged, it includes marketing and booking of cargo, allocation of
space, responsibility for routeing, documents, port facilities, loading/discharging, control of port expenses, stevedore
contracts, etc.

Tanker and Dry Cargo Department arrange employment for the vessels and are also responsible for their operation.
These departments are frequently referred to as Chartering Departments. The tanker department will usually handle
bunker contracts for the company fleet. In the organization chart the interaction between the main department and
the sub departments is shown by the lines of authority. This authority goes down from the shipowners, through the
main departments and down into the organization. The lines show how the instructions for the company are
transmitted from the shipowners through the different links. All department heads are fully responsible for their own
activities and they must therefore be fully familiar with all matters concerning their departments so as to be capable
of managing and making decisions. Information, messages, tasks, proposals, etc. follow the formal lines of
communication. This is the main principle, but modifications occur.

Other departments. Department for other activities reflects the fact that many shipping companies have assumed
other shipping related activities within their organization, such as agencies activities, forwarding, travel agency, and
in recent years, offshore activities. Shipping companies will frequently build their organization around key personnel
and the dividing lines between the departments might therefore be very different from those mentioned above.
Shipping companies should also be aiming at flexibility in their organizational development, as changing conditions in
the world market might make it necessary to reorganize or set up new departments to cater for new trades or
ventures.

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EVALUATE

1. To what department is the job to decide what business to go for and to authorize the brokers accordingly but
such decisions cannot be made without the certainty that what is proposed is physically and conveniently
possible?
2. The concept of big data – the immeasurable amount of data collected from internet-capable user devices –
has disrupted many traditional business structures. Commercial shipping and trucking are no exceptions. By
what means that the tasks that used to be inefficient or even impossible are now achieved easily?
3. Safety will also be dictated from external sources which, in the case of responsible maritime nations, will be
in the form of statutory manning levels. What is this statutory manning levels mean?
4. A voyage estimate is an estimate of the financial outcome of the voyage(s) or period being considered. To
make this estimate three cost areas have to be combined. The first are the fixed costs, how is this cost area is
estimated?
5. Unfortunately, but rarely, there are occasions when this can be a problem. How does the ship manager avoid
the responsibility for the owner’s debts, when he is actually part of the same business?
6. It is usually the ship manager’s responsibility to choose and appoint the port agent. However, it has to be
recognized that many Charterers will wish to nominate the agent to be used by the owner in respect of their
business. What are the reasons behind of this?
7. Bigger liner companies, for instance, will normally operate with a great number of agents, the same number
of stevedore connections as ports called at, and a number of special firms such as shipbrokers, lawyers, tax
consultants and auditors who have standing orders according to agreement. What does most shipping
companies prefer to use?
8. The reporting of the economic results should follow the organization chart and will, if correctly done, be of
prime importance to the management, for the organization's mode of operations and for the control of the
results. What department is responsible for this reporting?
9. Tanker and Dry Cargo Department arrange employment for the vessels and are also responsible for their
operation. To what department these departments are frequently referred to?

EXTEND

• Crews from some countries are very much cheaper than others, compare wage levels between, for example The
Philippines and Norway, the latter are two and a half times higher. Some maritime countries insist on the employment
of nationals of the flag of registry others, whilst retaining many of the safety aspects of ship manning, are more relaxed
about the nationality of the crew. This has given rise to companies which undertake to provide entire crews, many
such crewing contractors. Why do these crewing contractors ensure the competency of their crew? Explain.
• When a port agent is appointed it is that agent’s responsibility to act at all times in the best interest of the vessel.
The shipowner will need to keep the Agent advised as to a ship's movements and Expected Time of Arrival (ETA). The
agent will know from the schedule when the next vessel is due at his port. The owner and agent will be in constant
communication by telephone, fax or e-mail regarding changes to schedule and all the other anticipated requirements
for the ship. What other matters the Master obviously necessary to give the Agent? Explain.

References:
Ship Superintendency:
• http://docshare02.docshare.tips
Chartering Practice:
• Galvagnon/Pearson ENMM Marseille 2002
Revision Status:

MOD SHP 304(11)

Rev.: 00
Issue Date:
March 5, 2021

Form No. BPM2-CME 20 F-009 SHP 304(Module 11)

Rev.02 Page 10 of 10