Shipping management is used by owners of ships, who employ an independent company to assist with their ship management. This is usually done as an annual agreement, in which the company is paid a certain amount to look after everything on the ship. Today we’re going to discover what’s included in shipping management and its benefits to the ship owner.
What is Shipping Management?
Shipping management involves a ship owner, whether an individual or a company, leasing the ship to a management company for a certain period of time. If it’s a shorter contract, the owners can move companies after the contract is finished if they find a more competitive offer. While many ship owners opt to lease the whole ship to a company, they may prefer to keep control of some parts of the operation. Ship management can be used for any size of vessel, which may be offering a wide range of services. The management company will maintain the vessel throughout the contract and support the operation of the ship.
What is Included in Shipping Management?
Ship management is a multifaceted task and involves work during the sailing, but also before and after. Ships should always be approved before sailing, and this approval can be obtained from various classification societies. Some companies today focus on a specific type of vessel, such as container vessels, whereas others may be happy to manage any type of ship. If it’s the management companies first time operating in a certain area, then they are given temporary approval for six months before receiving an evaluation.
A shipping management company will offer full supervision of the ship’s maintenance and repairs. They will maintain machinery to a working standard and continually perform checks as needed. One major reason for owners opting to use shipping management services is that crew is provided by the company. This saves a lot of time and hassle hiring staff, which can be a long process that regularly needs attention. The company will ensure that the ship meets the required staffing regulations for sailing. The management company will also look after the loading of the cargo and the unloading upon arrival at the destination. If an owner is looking to hire their ship to someone else, a management company can also assist with this process.
As shipping involves such a high amount of paperwork and procedures, owners appreciate the assistance a shipping management company can provide. They’ll look after contracts for lube and bunker oil and will know how low they can negotiate prices. The company also pays any of the expenses, so the owner doesn’t have to be involved in that procedure. Also, one important task they can assist with is arranging a ship’s membership with a Protection and Indemnity (P&I) association.
If any incidents do occur on the ship or with the goods being shipped, shipping management companies will look after the claims for insurance and salvage, saving owners a lot of time and paperwork. Speaking of insurance, they also arrange the insurance for the ship itself to ensure it has adequate coverage for its voyages. Finally, it works to ensure the ship is fully stocked with supplies and stores for the crew working on board, ensuring everyone is well fed and watered at all times. While it costs a fair amount for a ship owner to employ a ship management company, as you can see, they take care of many time-consuming processes. This service is extremely popular with ship owners who are looking to free up time in their business and lives.
Why Would Someone Use Shipping Management Services?
As you can probably gather from the huge list of tasks ship management companies undertake, there are many reasons a company would opt to use this service. With over 50,000 ships in the world’s merchant fleet, it’s important to understand not all of these vessels are owned or managed in the same way. Many big companies order new ships, but instead of paying outright for the millions of dollars in expenses, they use a shared fund. This fund then owns the ship together, limiting the risk for everyone involved as the vessel becomes its own company.
Of course, private investors and banks usually lack the expertise to manage a ship by themselves, which is why they hire a ship management company. These companies are then given a budget by the owners, which they use to complete all the tasks we listed above. Depending on the budget and requirements, the ship management company will take care of the whole of the operation or may just look after certain aspects of the day-to-day running of the vessel. While many owners use a ship management company, there’s also another option. This involves employing a ship manager directly with the owner, which is often used within maritime companies. Large companies may have the capacity to be both the owner and the manager, and they sometimes opt to charter their vessels to assist other companies in transporting their goods.
Advantages of Shipping Management
Many top ship owners are quick to share the benefits of using this service, which is why it’s so commonly used around the world today. Owners find a third-party management company who can look after the ship and maintain it to the highest quality. Management companies are experts in this field and have the resources to look after your ship, hire its crew, and smoothly run the daily operations. While there is a cost associated with this service, many ship owners find it’s well worth the output and can be cost-saving in the long run instead of looking after these separate entities by themselves.
The increased availability of resources that shipping management companies have easy access to offers many advantages. It gives ship owners the flexibility and time to work on their other projects, so they don’t have to worry about smaller day-to-day concerns. Many ship owners appreciate the flexibility this service offers, and they can then use this to help grow their company in the long run. They find that they experience improved results after using this service on their vessels for a longer period of time.
Another huge benefit ship owners notice from shipping management is a standardization of the service their vessels offer. If you have multiple vessels managed by one company, you know the crew, operation, and upkeep will be similar throughout the fleet. Owners enjoy a high standard of operation and lower overall costs over an extended period of time. When it comes to the technical aspect of operating a ship, you’ll be in safe hands using an experienced shipping management company who will have witnessed most issues in the past before and know the best solution to any challenges.
As shipping management companies operate multiple ships, they have the scale to offer lower operating costs while still focusing on safety, efficiency, and offering high-quality services. From a human resources point of view, they also have access to a broader base of crew and can train and hire with ease. Crew often leave the industry for other ventures, and so the ability to quickly replace these staff members is advantageous and helps avoid operation delays. The main drawback of using this service is in regards to the cost, but many ship owners find this to be an advantage in the long run and believe that it saves them money over a few years.
Using ChartDesk To Assist With Your Operations
ChartDesk aims to assist the shipping industry with a next-generation shared inbox solution. This helps shipping companies and owners to collaborate with ease using a modern cloud-based solution. There is a wide selection of management tools on offer, which help support the daily work of the team. While the shipping industry is a huge worldwide industry, it still commonly relies on manual processes and has yet to rely on technology in the way other fields have. ChartDesk believes this is starting to shift, and their tools will help make this change much smoother for everyone.
As new technology is being adopted by the maritime industry and operations are digitized, ChartDesk can assist with this process. Regardless of your position and involvement in the industry, you’ll find this service offers many tools to help manage your workload. It’s easy to adopt and use and is integrated with other popular chartering tools from commonly used providers. Users can choose between a subscription-based SaaS or enterprise deployment in a private cloud.
Shipping management is key to the success of the shipping industry today and helps many ship owners advance their business without handling their fleet’s day-to-day operations. Teaming up with an experienced shipping management company offers many benefits to ship owners, who have extensive networks of crew and services available to them. It takes the hassle and stress away from managing a ship and allows joint funds to leave the daily operation to the hands of the experts. As the service can be used by vessels of any function and size, it can help almost any company operate and support their ships.