Tolani Maritime Institute; B Tech ME, IV th Year
Online learning material for subject: Ship Operation and Management
Number: Ch 6 -02 Prepared By: S K Srivastava
Chapter VI– Shipping Companies
Ship Management
Ship management: There is more to ship operation than simply buying the ship, it involves finding cargo,
contracting with various parties, voyage planning, budgeting, arranging resources, operation &
maintenance of ship, complying with various international & local regulations etc. Shipowners sometimes
does not want to carry out all activities by themselves hence they appoint ship managers to perform them
on a fee.
Small shipowners want to take advantage of expertise of ship manager and Economy of scale as ship
manager operates large number of ships.
Types of Ship Management:
a) Manning-only management or Crewing: Here the manager provides the ship crew, appropriate in
number & competency complying with the requirements of flag state (STCW 95). Nationality can be of
owner’s preference in International registers (Flag of convenience). Crew must comply with standards
regarding competency, health, safety and responsible employment. Manning agent has to ensure joining
and repatriation off crew, training and welfare. Manning agent enters into contract with the crew on
behalf of Shipowner after negotiation of wages and terms & conditions of employment, pension
arrangement, tax, social security and other mandatory issues as per their country of domicile. They have to
ensure that crew have passed a medical examination with qualified doctor and ensure that crew shall have
a common working language and command of English language of a sufficient standard. In India they are
called RPSL (Recruitment & Placement Service License) who are approved by DG Shipping and have to
comply with all regulations of DGS.
b) Technical Management: Here the managers provide following services:
Ensuring that vessel complies with requirements of the law of flag state - Ensuring compliance with ISM &
ISPS Code - Supervise the maintenance and general efficiency of the vessel. - Supervising drydocking,
repairing, alteration to vessel - Ensure compliance with requirements and recommendations of
classification society - Supervising the sale and physical delivery of vessel - Supervising new shipbuilding
and physical delivery of vessel - Arrangement of Bunkers unless supplied by Charterer - Arrangement of
Stores, lubes, chemicals, gases, provision etc. unless provided directly by owner.
c) Commercial Management: Here the manager provides following services:
Seeking and negotiating employment of vessel and the conclusion of charter parties or other contracts
relating to employment of vessel. - Arrangement of Bunker fuel - Voyage estimation and accounting and
calculation of Hire, Freight, Demurrage or Despatch due from or to charterer of vessel. Assisting in
collection of such dues. - Issuing Voyage Instructions to Master of Vessel - Appointing Agents - Appointing
Stevedores - Arranging surveys associated with cargo - Arranging Insurance
For resolving any Query, please send mail to [email protected]
Tolani Maritime Institute; B Tech ME, IV th Year
Online learning material for subject: Ship Operation and Management
Number: Ch 6 -02 Prepared By: S K Srivastava
d) Total Management: These include Technical, Manning & Commercial Management under a single
umbrella.
Agreement between Shipowner & Ship manager: Most widely used contract is suggested by BIMCO’s
SHIPMAN 2009 Some Important features are:
- Commencement & Appointment date
- Authority to managers (Managers shall authority to take actions from time to time as per their discretion
to enable them to perform the management services)
- Types & Details of service provided (Total, Crewing, Technical, Commercial)
- Obligation of Mangers (To protect & promote interest of owners, to perform their duties as detailed)
- Obligation of Owners (To pay all sums to managers punctually, to cooperate with managers, to inform all
facts as required)
- Insurance Policies (provided at owns expense for H&M, P&I, War Insurances)
- Income collected and Expenses paid on behalf of owners (Managers & Owners to maintain account of the
same)
- Management fees and Expenses (Owner shall pay management fees as agreed)
- Budget and management of funds (Manager prepared budget & monitors)
- General Administration (communication, documentation, notices)
- Inspection of vessel (Owners right to inspect vessel)
- Duration of Contract
- Termination (Circumstances leading to termination)
- Dispute Resolution (in accordance with English Law, London Maritime Arbitrator association rules)
ISMA Code: International Ship Managers association has adopted a code of ship managers standards
through which quality and safety can be enhanced.
The objectives of code are:
- Operating ship safety and efficiently
- Avoiding injuries to personnel and loss of life
- Conserving and protecting environment
- Protecting the owner’s assets
- Complying with statutory & class requirements
- Providing timely and accurate information to owner.
For resolving any Query, please send mail to [email protected]
