BASIC SHIPPING OPERATIONS

The Maritime Industry

Maritime Industry - anything related to the ocean, sea, ships, navigation of ships from point A to point
B, seafarers, ship owning and other related activities.

Shipping Business - the act of carriage of cargo from point A to point B using the ships which falls under
the Maritime industry.

Freight - the cargo that is carried using the shipping services offered by the shipping lines using the ships
which falls under the Maritime industry.

Logistics Services - the processes involved in getting the cargo from the manufacturers warehouse to
the receiver’s warehouse including arranging for shipping services offered by the shipping lines using the
ships which falls under the Maritime industry.

Supply Chain - the whole granddaddy process comprising of all aspects in a product cycle, for example
from picking of the fruit at a farm in Point A to delivering the fruit to the shelf at a store in Point B using
all of the above-mentioned industries, businesses and services.

Trade - is the basic economic concept involving buying and selling of goods and services, with
compensation paid by a buyer to a seller, or the exchange of goods or services between parties.
Trade is the reason all above businesses from the first to the last entity exist.

Crew Management / Manning Agency - responsible for providing crew (manning) of vessels under
a crew management contract.
This includes the sourcing, recruitment, selection, deployment, scheduling, training/upgrading
programs, and on-going management of seafarers engaged on vessels under crew management
contracts.

Maritime & Shipping Business Basic Terminologies

VESSEL - is a catch-all term, like 'watercraft', which describes any floating object used for the
carriage of people or goods.

Generally smaller and less complex vessels are 'boats', whilst larger and more complex vessels are
'ships’.

SHIP - a large boat.

DEADWEIGHT - the total weight that a ship carries or can carry.

GROSS REGISTERED TONNAGE (GRT) – all enclosed space of the ship, uses the total permanently
enclosed capacity of the vessel as its basis for volume.
Basis for dockage fees, canal transit fees, and similar purposes, charges based on the size of the entire
vessel.

NET REGISTERED TONNAGE (NRT) – carrying space of the ship for cargo, subtracts the volume of
spaces not available for carrying cargo, such as engine rooms, fuel tanks and crew quarters, from gross
register tonnage.

Gross register tonnage is not a measure of the ship's weight or displacement and should not be
confused with terms such as deadweight, tonnage or displacement.

BULK SHIP - bulk carrier, bulker is a merchant ship specially designed to transport unpackaged bulk
cargo, such as grains, coal, ore, steel coils and cement, etc. as its cargo.

TANKER VESSEL - is a ship designed to transport or store liquids or liquefied gases in bulk. Major types
of tank ship include the oil tanker, the chemical tanker and gas carrier.

CONTAINER SHIP - oceangoing vessel designed to transport large, standard-sized containers of freight,
they are large and fast, carry containers above deck as well as below, and their cargoes can be loaded
and unloaded rapidly.

TEU - A Twenty-foot Equivalent Unit (TEU) is a shipping container whose internal dimensions measure
about 20 feet long, 8 feet wide, and 8 feet tall.

RO-RO - Roll-on/roll-off (RORO or ro-ro) ships are cargo ships designed to carry wheeled cargo, such as
cars, trucks, semi-trailer trucks, trailers, and railroad cars, that are driven on and off the ship on their
own wheels.

Shipping

Shipping includes (but not restricted to) activities as below :

Booking cargo for specific vessels, sometimes weeks and months in advance.
Ensuring that all cargo booked is planned on the intended vessels.
Ensure that the cargo that is planned on the vessels is actually shipped.
Ensure that the stowage planning is done properly on the vessel to optimize the vessel loading.
Ensure safe loading and discharging of the cargo.
Issuing bill of lading and other documentation for all cargo loaded.

Ship Management

IMCO (Intergovernmental Maritime Consultative Organization) created formulas like the 1988SHIPMAN
agreement (Standard Ship Management Agreement), modified 10 years later, the latest edition of which
is that of 2009.
Originally, this agreement covered a wide range of commitments relating to the administration or
management of the ship, including human resources.
Ship Management under the 1988SHIPMAN agreement assumed the obligation of the management of
crews, they are also dedicated to technical management (choice of the ship’s maintenance inspectors,
repairs, etc) or commercial management (services for chartering, insurance, accountancy, collaboration
in the purchase and sale of the ship or bunkering)
With regard to the management of the crew and its contractual channeling, the parties resort to the so-
called forms law, that is, standard contracts that can be called «atypical» in that they are not covered by
international law and their compliance is relegated to the strictly private ambit.
This is because they are crew agreements created by the BIMCO (Baltic and International Maritime
Council) which, as such, is an international maritime association accredited as a non–governmental
organisation with the United Nations. This organisation has created various contractual modes, notably
including those dedicated to crew management.
The crew management company is responsible for the manning of vessels under a crew management
contract. This includes the sourcing, recruitment, selection, deployment, scheduling, training/upgrading
programs, and on-going management of seafarers engaged on vessels under crew management
contracts.
It also involves crew administrative aspects, such as payroll services, travel arrangements, insurance,
assistance with health, banking & financial services, career guidance, communication duties, as well as
team-building and family/social programs.
It was soon necessary to diversify the diverse types of management through other, more specific,
instruments, creating the standard CREWMAN agreement in 1994, limited exclusively to crew
management.
This last has been used by the ship owners exclusively either in combination with the previous one or
excluding elements relating to the crew from the SHIPMAN agreement.
As well as the purpose of the contract itself, the fundamental difference between the two agreements
lies in the way in which the ship manager or crew manager relates to the crew or, to be more exact, in
the way in which the managers exteriorize their position with the workers according to both
agreements.
So, while in the SHIPMAN agreement, the manager generally acts on behalf and in the name of the ship
owner, in the CREWMAN Agreement, the administrator acts on behalf of the ship owner but in its own
name. In both cases, it must be remembered that the seafarer signs the maritime employment contract
with the agency, thus producing the triangular relationship mentioned above.

Over time, the needs of the increasing specialisation in the outsourcing of crew management and its
adapting to the new international regulations to be obeyed such as the ISM Code, led the BIMCO, as
occurred with its Shipman counterpart, to create the CREWMAN A and CREWMAN B agreements, in
force since 2009, which set the rules for the contractual relationships arising from the crew
management contracts.

CREWMAN A

Contracting is undertaken on behalf of the ship owner.

Manager acting on behalf of the ship owner.

Insurance policies can be negotiated and contracted not only relating to the crew but of other types.
Assumes as an additional part of the contract the same obligations as in Shipman 98 with regard to the
preparation of budgets and annual and balance sheets and may also assume accountancy services as an
addition to the contract.

Cost plus fee, meaning that the ship owner pays a predetermined sum
monthly and in advance.

Non– compliance penalties, amount to be paid must be 10 times the

annual sum be paid.

CREWMAN B

Manager contracts the crew in its own name.

Insurance policies can be negotiated and contracted relating to

the crew only.

Lump sum is paid, also monthly in advance that covers all the costs of
managing the contract.

Non– compliance penalties, payment is six times the lump sum.

The manager is freed of all liability for the crew’s acts or omissions.

unless there is evidence of these being due to the so-called fault in selecting.

Crew Recruitment Agency

The crew administration agencies are trading organizations that act as intermediaries for recruiting
seafarers in the shipping industry and, very especially, in the context of the open registers.

These companies form part of the group of organizations that act in current maritime traffic as external
ships’ managers whose rise, heyday and later consolidation in the sector is due to diverse causes.

Generally, it can be said that their existence fulfills the need of shipping companies to adapt to current
maritime navigation conditions, the complexity of which requires the ship owner to resort to third
parties who, depending on their specialization, undertake various aspects of ship management
including, in this case, crew administration.

In fact, the resort to companies that recruit and/or contract ships’ crew is so frequent that these are not
only well known in the sector but are easily accessible to ship owners.

In addition, and despite what one might think, they act almost without restriction by locating
themselves in places that are the most convenient to them, normally in emerging maritime labour
supply countries.
It is therefore not strange that they have formed real world–wide networks where crew managers
contact ship owners with the crew to provide services on the ships they operate or own.

The contractual relationship that connects the ship owner to the crew management company is through
the signing of a manning agreement through which the manager commits to the owner to manage the
crew in exchange for remuneration.

With regard to the management of the crew and its contractual channeling, the parties resort to the so-
called forms law, that is, standard contracts that can be called «atypical» in that they are not covered by
international law and their compliance is relegated to the strictly private ambit.

This is because they are crew agreements created by the BIMCO (Baltic and International Maritime
Council) which, as such, is an international maritime association accredited as a non–governmental
organization with the United Nations. This organization has created various contractual modes, notably
including for our interests those dedicated to crew management.

Crewing Standard Procedures

Definition of Terms:

Accreditation:
refers to the grant of authority to a foreign principal to engage Filipino seafarers for specific ships
through a licensed agency for marine employment.

Principal:
refers to a foreign person, partnership or corporation engaging and employing Filipino seafarers through
a licensed manning agency.

Ship owner:
refers to the owner of the ship or any other organization or person, such as the manager, agent or
barefoot charterer, who has assumed the responsibility for operation of the ship from ship owner
and who on assuming such responsibilities has agreed to take over all the attendant duties and
responsibilities.

Enrollment:
refers to the enlistment to the administration of a vessel by an
accredited/registered principal to its appointed manning agent for the purpose of employing seafarers.

Administration:
refers to the Philippine Overseas Employment Administration (POEA)
 Agency:
refers to a licensed manning agency, or to any person, partnership or corporation duly licensed by the
Secretary or his duly authorized representative to recruit and deploy seafarers for maritime
employment.