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Commercial voyage management for cargo ship

There are numerous complexities in cargo ship voyage management. However, by carefully planning each stage of a voyage, the Master and his management team can make a significant difference in the ship's business. It covers a whole range of topics and requires excellent communication and coordination between all parties involved, mainly the ship, technical manager, and commercial Operator. Consideration to be given with planning for Ballast Passage, Load Port, Laden Passage & Discharge Port

A vessel may be fixed to make multiple voyages or to provide services to a charterer for an agreed duration of time to lift various cargoes for the time charterer's or its customer's account. There are different types of charter parties used.



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Another prevalent method to segment the business is liner trades versus tramp trades. Bulk dry cargo (coal, iron ore, wheat, and so many others) is carried in ships that have historically been referred to as tramps. They do not follow a scheduled itinerary but carry cargos under Contract from place to place. For example, a shipowner may "fixed" his vessel to carry a cargo of grain from New Orleans to Capetown on behalf of an exporter. It will do so under a contract referred to as a charter party. Upon completion of the charter, the vessel will look for another cargo. Perhaps one is available at or near the port of discharge. Again the vessel may have to ballast to another and distant port to lift a cargo under another charter.

Likewise, it is essential to understand that there are many ways to segment the shipping business. For example, one method is dry cargoes versus wet cargoes. Some companies carry dry bulk. Others carry petroleum and chemicals. A vessel may be fixed to lift a load of Arabian Light crude oil for discharge in Hueston, Texas. Bottom line - tramping is the process of carrying cargo without a fixed schedule.

Shipping companies can be substantial, be publicly traded, and own a large fleet of vessels. For example, N.Y.K. Lines maintain its offices around the world. They have some 700 vessels under control.

There exist some smaller company that may be privately held and operated as a family business, owning a fleet of a few vessels. The job titles in any one shipping organization naturally will vary from company to company and are to numerous to list here. However, typical opportunities might include:
  1. Vessel Operations - is the liaison with the ship’s captain and operates the vessel shore side. He /She must tend to the vessel's needs, arrange for bunkers, appoint and work with port agents, arrange for ship's stores and supplies, work with the vessel's classification society, communicate with the vessel's charterers and cargo interests, invoice hire, freight, demurrage and so much more.

  2. Chartering - fix the vessel's employment directly with charterers or via competitive shipbrokers and make sure that the vessel remains employed as much as possible at favorable rates. He / She must also follow the shipping market to anticipate prospective movement in freight and hire rates. Risk Management - attend to all of the vessel's insurance needs, for example, Hull and Machinery insurance, Protection and Indemnity, Freight, Demurrage and Defense, Kidnap and Ransom insurance, among others, and work with insurance adjusters to resolve insurance claims.

  3. Claims Handling - investigate and resolve claims that may be made against the ship owning company and the vessel, for example due to alleged cargo loss or damage during a voyage and to assist liability insurers and / or their attorneys in the event formal legal proceedings are commenced.

  4. Crewing - attending to the vessel’s crewing requirements, directly or via crew managers, tend to repatriation of crew upon completion of employment and other crew transportation needs, work with payroll and deal with other wage and benefit issues, training, etc.

  5. Compliance – insuring the vessel has required trading certificates, for example the Loadline Certificate, Safety Management Certificate, Ship Security Certificate, Certificates of Financial Responsibility, among many others, and is in compliance with flag and port state controls' requirements. There are many other possibilities. Obviously shipping companies will also employ those found in other types of businesses such as accountants, attorneys, credit managers etc.


Voyage Orders

Voyage Orders should be received onboard via the commercial Operator (for voyage charter vessels) of otherwise the Time Charterer's Operator. It is extremely important that the correct lines of communication are used and that the Master always ONLY follows orders from the correct person. Local orders SHOULD NOT be followed unless prior approval is obtained. Generally guidance is as follows:
  1. Only follow voyage instructions that are sent to you by your Operator unless you have prior and clear instructions from your Operator to follow local instructions.
  2. Be especially careful if on time charter and ensure that all instructions come from your time charter operator. If in doubt contact them for clear orders (or contact us if you need assistance).
  3. Never assume that cargo surveyors or terminal personnel have been briefed with the same instructions that you have. If you get conflicting information then contact your Operator immediately.
  4. The voyage orders are your definitive instructions. If you receive information or instructions from anyone (even if it appears to be from the Charterers directly) that contradicts these orders then always contact your commercial Operator for verification.

Time charter routing

For many years the decision of the Master on which route to follow was beyond question and his choice in the best interests of all parties was nearly always considered final. This position changed significantly following the famous case referred to as "Hill Harmony". Some detailed information regarding this case is available in Attached Documents however it should be noted that if the Master deviates from weather routing advice then there must now be a justifiable reason for doing so.

If time charterers engage a weather routeing service and the Master decides to deviate from their recommendation then the commercial Operator should be advised in advance.

Off-hire

Time Charters and Pools have very strict off-hire clauses designed to compensate the Charterer for unavailability or under-performance of the vessel. It is important that off-hire is minimised wherever possible and that all opportunities for maintenance during waiting or idle time are utilised.

This requires close coordination between the ship and management office. Important: After tendering NOR at any port, the vessel should not be disabled unless prior approval is obtained. If the vessel is called into berth and is unable to move the original NOR could be deemed invalid and subsequent waiting time would not count as laytime.

Deviations and Delay

A deviation is a departure from the intended voyage or Contract of Carriage and the vessels commercial operator must be advised accordingly. It can be either geographical or the introduction of an element of risk into the voyage which was not envisaged at the time of signing the Contract.

If a deviation is unjustified, the shipowner can lose all rights of limitation and all the defences and exceptions available to him. Consequently, the Ship Owner has to take out additional insurance (known as S.O.L. cover or Ship Owners Liability) to cover the cargo during this duration.

A justifiable deviation is one which is required for the safety of property or life at sea, or something has happened since the commencement of the voyage which makes the voyage impossible unless the deviation is effected. This must be considered when deviations are being contemplated or reported for non-essential purposes.

Bunkering

It is important to understand the commercial aspects of bunkering and how the onboard management can make this as cost effect as possible. The cost of bunkering the vessel contributes to a very large portion of the Owner's (or Disponent Owner's) expenditure. This can be broken down into two areas – what can be controlled and what can not. The bunker market is largely uncontrollable for an Owner or Operator and if he needs to bunker his vessel at a port then he will largely need to pay the market price. He can try and better the market by using contracts with various suppliers or even hedging bunkers; however he will invariably ride the market. The bunker management onboard though is controllable to some extent. By ensuring that the largest bunker tanks are free and available for bunkers at the cheapest ports, the Master and management team can make a difference. This requires good planning onboard between deck and engine departments.

The management team can also ensure that the bunkers are used as efficiently as possible, by actively taking a role in the speeds that the ship steams at (in conjunction with the Commercial Operator), and ensuring that the vessel has a clean hull and propeller and is technically sound (in conjunction with the management office). There have been numerous examples of bunker suppliers trying to defraud vessels with under supply or off spec bunkers, and it is vital that ships staff take all possible precautions. One of the most well reported "tricks" is cappuccino bunkers where the supplier pumps air into the bunkers to increase the volume artificially.

In the event of any dispute between the ship and bunker supplier the hose should remain connected and the commercial Operator and/or management office contacted for advice as soon as possible. DO NOT sign the bunker delivery receipt until authorised to do so. Further advice can be found in the Attached Documents.



Some Reputed Commercial Vessel Operators:
  1. Liberty Maritime Corporation is a Long Island based commercial shipping company that operates U.S. flag and various foreign flag vessels. They service the U.S. Jones Act trade and carry many cargos on behalf of the U.S. military.

  2. The Foremost Group is a privately held family-run shipping company based in New York City and operates globally, chartering vessels to companies in the dry bulk shipping industry. Its fleet includes some of the world's largest bulk carriers.

  3. Navios Maritime Holdings, Inc. is a global seaborne shipping and logistics company focused on the transport and transshipment of dry bulk commodities including iron ore, coal, and grain. The company is based in Greece and has offices in New York.

  4. Clipper Group is a global company with an office in Houston. Clipper has taken delivery of more than 100 newly built bulk carriers in the past decade. They mostly operate Handysize, Supramax and Ultramax vessels.

  5. Oldendorff Carriers is a longstanding family owned shipping company dating back generations with headquarters in Germany. It operates around 700 ships worldwide and also has offices in Connecticut. Oldendorff Carriers are one of the world's largest dry bulk shipping companies, shipping and transhipping over to 300 million tons of bulk cargo every year.

  6. Ultrabulk owns a massive fleet and is a Danish company with offices worldwide including Stamford, Connecticut. They offer services in five segments namely Parcel, MPP, Handysize, Supramax and Panamax segments.

  7. Genco Shipping and Trading is a publicly traded company with offices in Manhattan, Singapore and Denmark. They are a leading provider of international seaborne drybulk transportation services of iron ore, coal, grain, steel products etc.


Our additional pages contain somewhat larger lists of resources where you can find useful informations
  1. Dry Cargo Charterparties

    2. There are numerous various forms, but to give a taste of dry cargo time charters, two types that are commonly used are: - New York Produce Exchange (NYPE 93) Baltic and International Marine Council (BALTIME 1939 (amended 2001)....

  2. Tanker Time Charters

    3. Specific information such as, parties to the contract, where and when the vessel will be delivered, rates of hire, general permitted cargoes, general trading range etc. ....

  3. Documentation & notices

    4. When a vessel is on Time Charter, bunkers and the majority of port services and costs, etc., are to the account of Time Charterers. However, should Time Charterers default on payment, then these charges may fall on Owners and there will then be a serious risk of the vessel being arrested for debts incurred by the Time Charterer. ....

  4. Function of bill of lading

    5. The Bill of Lading is one of the most important documents that the Master will sign and therefore strict controls on how it is issued are required. Although the B/L is usually drafted by the Shipper and presented to the Master for signature, it is an Owners document. One of its three functions is to act as a receipt for the cargo, so therefore the Master must make sure that the quantity and description of the goods is accurate as he will be expected to deliver the same to the Receiver.....

  5. Role of ship classification society

    6. Classification societies verify the structural strength and integrity of the ship’s hull and its fittings, as well as the reliability and function of the propulsion steering systems, power generation, other systems on the ship....

  6. Seaworthiness for cargo ship, international navigational condition & procedure for Insurance claim

    7. Insurance premiums amount to a very large proportion of the ship’s running costs. Whilst the owner insures his ship against certain risks and may present a claim which will recuperate at least part of his losses, the effect of submitting many claims will have the effect of increasing the insurance premiums for the next year. It is therefore in everyone’s interest to ensure that risks are not taken, that the ship operates safely and that accidents and incidents are avoided....






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