Port Operations
4.5 PORT AGENTS: LINER SERVICES, TRAMP TRADE, AND OFFSHORE SUPPORT AGENTS
4.5.1 FONASBA
The international “Federation of National Associations of Ship Brokers and Agents”
(FONASBA) and the US Association of Ship Brokers and Agents (ASBA) are independent membership trade associations that guide ship agents through the issuance of regular standard agreements, contracts, and advice. Since its inception in 1952, FONASBA has established a set of standards aiming to establish a holistic support system for port agents and shipbrokers. As of 2010, FONASBA had 36 full members, 12 associate and candi- date members, and five club members (FONASBA 2010).
Its General Agency Agreement for liner services is signed among liner principals and general agents. The agreement was modified and implemented in 1993 and has been strongly recommended by BIMCO.
FONASBA’s “Quality Standard for Shipbrokers and Agents” has been approved by INTERTANKO, which has also endorsed FONASBA’S Port Tramp Agency Working Group. FONASBA has also established an ambitious plan of quality standardization for port agents and brokers. The Quality Standard will provide shipowners and operators with a best practice selection system, in order to evaluate the best industry professionals in terms of economic status, expertise, and industrial know-how (FONASBA Annual Report 2010).
4.5.2 Agency Selection and Practices
The agents are selected by the principals’ operations department, initially by “shopping around” and comparing services, prices, company reputation, feedback from the ship, recommendations from business partners, and so on.
Although there is no formal contract to be signed between the agents and their principals in the tramp trade, the appointment confirmation that the principals e-mail to the agents contains a concise confirmation of the appointment, the agreed agency fees, the provisional services required with the agreed tariffs, and so on. This confir- mation, along with the e-mails exchanged by both parties, has legally binding conse- quences, and if needed can be used for claims, arbitration, or the court of law. The principals are legally liable for the consequences of all written instructions and subject to evidence and circumstances, the tacit authority, and implied guidelines given to the agents. The key elements here include what instructions were given to the agents, what
services have been undertaken by the agents prior to the ship’s departure, and at what price.
The initial agents’ appointment letter is accompanied by funds remitted to the agents prior to the ship’s arrival at the specific port of call, reflecting agency fees and specified tasks. The day that the vessel departs from the port, the agents produce the disbursement account (D/A). This is a package of numerous pro forma invoices, payment receipts, and supporting documents pertaining to the agency’s services offered for the specific ship at the specific port.
In case the agents are the appointed entity as stipulated by the C/P, the D/A is for- warded to both the shipowners and the charterers, as the services rendered jointly involve instructions received by both parties. In the case of protective agents, the D/A is submit- ted to the agents’ exclusive principals.
4.5.3 Port Agency Responsibilities
A port agent’s responsibilities literally encompass and oversee all ship’s operations while at port. There are three principal areas of agency service, which can be carried out by the same agency companies:
a. Agency for the tramp trade, which covers an extensive collaboration of a shorter duration, yet lacking a contractual agreement and deep involvement in the prin- cipals’ financial and commercial transactions.
b. Agency for the liner trade, which entails a long-term contractual agreement and the agents’ authority to support their principals’ marketing, financial, logistics networking, customer support, and operational endeavors.
c. Agency for offshore support and logistics. Modern port agents become increas- ingly accustomed to the industry’s new trends and expand to the oil and gas offshore and logistics agency services. The industry increasingly requires the sup- port of ship and offshore agencies, which have managed to bridge the maritime, inland, and oil and gas industry (see Chapter 11).
Despite their functional differences, many of the agents’ duties are overlapping. An analysis of the agency types and functions is covered herewith.
a. Liner Services Agency Duties
The liner trade differs with the tramp trade as it offers scheduled, consistent services to predetermined trade routes and carries cargoes from multiple char- terers and complex logistics networks. These special characteristics necessitate more complex, all-encompassing agency services, which cover the duties of a booking agent, an operations coordinator, a shipbroker, a commodity broker, and, depending on the agreement, sometimes reaching the authorities of a ship manager. Their monthly fees depend on the fleet size, schedule regularity, and duties.
A FONASBA “Standard Liner and General Agency Agreement” is signed between the principal, that is, the liner owners, and the port agents, and stipulates terms related to the services to be provided and the payment terms (FONASBA 2013).
Figure 4.15 demonstrates a FONASBA Agency Agreement.
FIGURE 4.15 FONASBA agency agreement.
FIGURE 4.15 (Continued) FONASBA agency agreement.
. 3.4
FIGURE 4.15 (Continued) FONASBA agency agreement.
FIGURE 4.15 (Continued) FONASBA agency agreement.
FIGURE 4.15 (Continued) FONASBA agency agreement.
A liner agent’s areas of responsibility encompass the duties of a commod- ity broker and a shipping line’s operations coordinator on one hand. On the other hand, their traditional ship agent’s duties resemble the tramp trade agent’s responsibilities.
In terms of cargo handling and operations, a liner agent’s work may entail the following principal stages:
Offering freight quotations, promotion, and marketing services
− Distribution of the fleet’s sailing list. Networking and pursuing commer- cial negotiations with manufacturers, importers, exporters, cargo for- warders, and so on. Circulating the liner company’s newsletter, obtaining feedback, and reporting their findings to their principals.
Handling inward and outward freight
− Handling inward freight and providing the shippers with information on the carriage, tracking, and discharge of goods. Booking outward freight and providing the shippers with information on the carriage and tracking and loading of goods. Producing and monitoring inward and outward booking lists.
Administering freight dispatch
− Gathering documentation related to the loading and discharging of freight, such as bills of lading, cargo manifests, delivery orders, shipping permits, and so on. Liaising with the charterers or cargo receivers as to the bills of lading (Bs/L), dispatch and delivery of the cargo. Ensuring the freight integrity, and that data are in line with the Bs/L information.
Administering freight collection prior to the ship’s departure and before the Bs/Ls have been delivered. Supporting customs’ formalities and docu- mentation process. Attending cargo delivery.
Reporting to their principals
− Reporting market trends and actual cargo booking agreements and cur- rent status of freight orders. Freight estimation and dispatch arrange- ments based on cargo dimensions and weight. Estimated ship’s schedule revisions and port stay, based on cargo loading and discharging volumes.
b. Tramp Trade Agency Duties
A charter party agreement signed between the shipowners and the charterers stipulates in great detail the terms and conditions of carriage of goods by sea.
Since the port is a focal point of this contract, the Agency Clause is established to verify whether the ship’s agents at both the loading and discharging port(s) are formally nominated by the charterers (i.e., charterers’ agents) or the shipowners (owners’ agents).
During C/P negotiations, both sides pursue to nominate the agents, as this will ensure that a trusted, loyal entity has been appointed to look after their own interests. The final decision of who appoints the agents depends on many factors, such as (a) each company’s market power to impose their own terms and condition during negotiations, (b) the willingness of both companies to compro- mise and establish a long-term partnership, but most important, (c) the charter party’s type and duration: a charter party’s type and consequently its duration will determine the party responsible for the agents’ appointment.
In voyage charter parties, the short duration of the agreement entails a single visit at the loading and discharging port(s) of call. Each party can divide the
agency appointments, for example, the owners may nominate the agents at the loading port(s), and the charterers may nominate them at the discharging port(s).
In time charters and bareboat charter parties, the charterers become the ship’s disponent owners, a fact that suggests that although they do not own the ship, they assume full commercial control over its operations. The time charterers assume full control of the ship’s trade routes, which over the course of years may involve literally dozens of seaports and agency nominations. Generally, in a T/C agreement, the shipowners pay the ship’s running costs (fixed costs) and the charterers are in charge of the operational costs (variable), which depend on the selection of ports of call, which entirely depend on the charterers. Agency nomination and agency fees are therefore for charterers’ account. Under this arrangement, the nominated agents consider the charterers as their principals, yet they must equally support the shipowners and the ship’s master and provide them with the services required.
Husbandry or protective agents
Whatever the agreement, the entity that has not nominated the C/P agents can still appoint their own Protective Agents, which will serve exclusively the inter- ests of this entity, while still working close with the formal appointed agents. A protective agent is a different agency company to the one stipulated in the C/P agreement. Since the agents nominated by the charterers may be in charge of all the cargo handling-related services, the husbandry services include different or overlapping services, such as the following:
• Crew handling; in case of crew changes, agents in collaboration with the company’s operations department can arrange for crew visas, launches and transportation, hotel reservations, and so on.
• Crew medical and various services, that is, visits to doctor, hospitalization, crew transportation, correspondence, and communication arrangements.
• Spare parts, purchase, customs’ clearance (inward and outward), dispatch and delivery onboard the ship.
• Third-party liaison with contractors, that is, repair teams, shipyards, drydocks, and so on.
• Bunkering operations (IFO, MDO, lubricants).
• Cargo sampling and bunkers’ sampling and dispatch to laboratories.
• Verification of actual port activities and events, which are already handled by the appointed agents, that is, verification of strikes, weather conditions, cargo handling, cargo damage.
• Ship-to-shore communication and contact with local authorities.
c. Agency for Offshore Support and Logistics
Port agency services now involve an active partnership with offshore special- ists, and their new role is highly supportive and essential for the effective execu- tion of oilfield services. While their daily duties very much resemble the duties of a protective agent, the difference lies in the offshore industry’s geographical concentration, limited mobility, and continuous, long-term collaborations with drilling units and contractors that remain in a designated area for months, even years.
Modern offshore and shipping agencies now require increased efficacy, as their collaborations and agency attendance spread out in the critical areas of offshore salvage and emergency response, logistics, procurement, transportation, repairs, and so on.
Their new clientele now expands to the following:
• Drilling contractors
• Seismic survey ships
• Offshore exploration, production units, and support vessels
• Floating production systems
• Transportation, installation, and commissioning contractors
• Construction and engineering contractors
• Subsea construction contractors
• Dredging companies
• Accommodation barges
• Pipe laying and cable-laying companies
4.5.4 General Agency Duties, for Tramp, Liner, and Logistics Services
An agent’s duties in terms of operations in the maritime and logistics industries overlap and are hereby analyzed.
A) Prearrival Preparations
Typically, the charter party stipulates that the ship’s master needs to provide the ship’s estimated time of arrival (ETA) notices for 4 days, 3 days, 2 days, and 24 hours prior to the ship’s arrival; hence, the port authorities, the charterers, the shipowners, and the agents are duly notified. Once the master has informed the agents of the ship’s ETA, the agents commence the preparations for the ship’s stay at port. Hence, prearrival is a syn- onym to preplanning.
At this stage, the agents need to report to their principals the port’s overview in terms of the following:
a. Socioeconomic trends such as trade agreements, investment, leasing opportuni- ties, and so on
b. Political events such as strikes
c. The port’s strategy, such as expansion or construction plans
d. Discrete, yet accurate information about companies in the same supply chain, potential partners, or potential rivals
Indeed, the agents should be the eyes and the ears of their principals.
The master forwards to the port authorities, through the agents, a copy of the cargo manifest, the bills of lading. If the ship is already loaded, the stowage plan is required, that is, a diagram demonstrating the stowage placement of cargoes. In bulk carriers, it shows cargo loaded in every hold. In general cargo ships, it also reveals cargo loaded on above-deck or between-deck spaces. For container ships, the stowage plan reveals the container boxes’ positioning onboard.
Modern tanker ships use hydrostatic calculation software that shows the liquid cargo contained in each tank. Generally, shipowning companies use stowage software to utilize the ship’s full loading capacity in the most efficient manner. Copies of the stowage plans, Bs/L, and cargo manifest are dispatched to the agents at the discharge port (D/P), to facilitate preplanning, that is, reserve the berth, shore facilities, storage space, stevedores, and so on, as needed.
Before the ship arrives at the port, the agents will receive from the ship’s master cop- ies of the ship’s documentation, for further processing with the port authorities, upon the ship’s arrival:
For ship’s quarantine/free pratique:
• Vessel’s deratting certificate
• Crew and passengers’ list
• Embarkation and disembarkation list for crew and passengers
• World Health Organization vaccination list
• Shipping declaration of health statement
• Past ports of call list
• Drugs list (ship’s medical chest) For port’s customs:
• Advance notice of arrival
• Crew and passengers’ list
• Embarkation and disembarkation list for crew and passengers
• Drugs list (ship’s medical chest) and firearms declaration
• Bonded stores list
• Crew declaration form
The pilots are notified if and where necessary tugs are reserved for the ship’s berth- ing and the berthing process has been scheduled. Once the berthing time is known, ashore arrangements can be made, including cargo handling, and booked services such as storage, as well as stevedores, can all be scheduled in full synchronicity for the ship’s berthing operations. Other operational activities that are secondary to the cargo may include bunkering operations, ship chandlers, spare parts delivery, and so on. Last but not least, other components of the supply chain, such as cargo forwarders and mul- timodal transportation providers (rail, road), are all in a standby mode for the ship’s arrival.
B) Vessel’s Arrival at Port
The agents declare the ship’s arrival to the port authorities. The agents support the master in Customs Clearance and Free Pratique. Meanwhile, the master or the agent can tender a NOR to the charterers, notifying them that the ship is in all respects ready to load or discharge. In case during or en route to cargo operations an adversity occurred beyond the master’s control (e.g., act of God, a hurricane, adverse currents, etc.), the agent will help the master in submitting a Letter of Protest. Although this document does not have a legal standing, in the court of law or arbitration, in case of a claim, it will be treated as admissible evidence.
The agent organizes any surveys, inspections, audits, or repairs that are scheduled to take place onboard the ship, in liaison with the respective authority, that is, Port State Control/Coast Guard, ship’s flag/registry, vetting inspections, cargo inspections/preload- ing inspections, shipyard and repair team, and so on.
C) Agent’s Services During the Ship’s Stay at Port
During a ship’s stay at the port, the agents are duly responsible for providing specific ser- vices pertaining to port expenses; ship, cargo, and crew expenses; and charges pertaining to inspectors, auditors, shipyards, repairs, and so on, as shown in Table 4.4.
TABLE 4.4 Port D/A—Extended
Principals: Owners/Charterers
Ship Agents:
Vessel’s Name: Previous Names:
Voyage Number:
Ship’s Particulars: IMO Number:
DRAFT: GT: CALL SIGN:
NT:
LOA TDW:
Current Port: ARR:
(Date and Time) B: SLD:
Previous Port:
D/A Currency: Rate of exchange:
Port Expenses (including canal or channel expenses) Port expenses:
Lightering expenses:
Pilotage charges:
Towage charges:
Mooring/Unmooring:
Customs:
Vessel shifting:
Port Transportation Launch:
Car hire:
Cargo Expenses
Stevedoring (Longshoremen) fees:
Cargo handling equipment: cranes, derricks, winches, etc.
Tally expenses:
Overtime expenses:
Vessel’s Expenses Cash to master:
Bank charges:
Stores/provisions:
Fresh water:
Ship chandlers/victualing:
Fresh food provisions (vegetables, fruit):
Spare parts:
Cell phones leasing expenses:
Shipyard expenses:
Drydock expenses:
Ship repairs’ expenses:
Transportation Launch:
Car hire:
(continued)
D) Loading, discharging, and cargo handling
i. Cargo verification: Prior to the ship’s berthing, the agents have verified that the freight has arrived at a port’s designated storage area and that its quantity, type, and condition are in accordance with the bills of lading and the cargo manifest.
ii. HAZMAT/dangerous goods: In case the ship’s cargo entails hazardous materi- als as full cargo or parcel cargo, the agent ensures the proper handling, mark- ing, labeling, and storage conditions, in accordance with its documentation, UN Number and material safety data sheet, safety data sheet, or product safety data sheet.
iii. Cargo and bunkers’ sampling and laboratory analysis: Another area of support is the case where a laboratory analysis is required for the cargo or the ship’s bunkers (IFO, MDO). In this case, the agents will liaise with laboratories for the sampling analysis.
iv. Machinery damage and leasing: In case the ship’s cargo handling gear breaks down, the agents in coordination with the shipowning company undertake the leasing of dock equipment.
TABLE 4.4 (Continued) Port D/A—Extended Crew and Passengers’ Expenses
Medical and hospital expenses:
Hotel accommodation:
Subsistence expenses (meals, etc.):
Cell phones leasing expenses:
Crew changes’ traveling expenses:
Transportation Launch:
Car hire:
Inspection/survey/audit expenses Hotel accommodation:
Subsistence expenses (meals, etc.):
Cell phones leasing expenses:
Crew changes’ traveling expenses:
Transportation Launch:
Car Hire:
Various Expenses
Representation and entertainment expenses:
Communication expenses (telephone, Internet, fax, courier, postage):
Agency fees:
Overtime:
Total Expenses:
Cash advance received: From: Owners/Charterers Date:
Total Amount Due:
Source: The author’s extended version based on BIMCO’s Standard Disbursement Account.
v. Claims, cargo damage: In case of any claims, for example, cargo damage, machinery breakdown, or other delay that would result into an off-hire, the agents administer off-hire and on-hire formalities, and the respective surveys.
vi. General average: Furthermore, the agents will support the ship and its cargo in case of general average. In this legal maritime principle, in case of an emergency, if freight needs to be jettisoned or any charges arise, the financial damage is shared by those involved with the ship and its freight, in proportion to the value of their contribution exposed to the common hazard.
vii. Logistics: While complying with the ship’s charter party agreement pertaining to the cargo transportation, as well as the cargo documents, the agent ensures the cargo follows the preplanned logistics route with the designated carrier.
viii. Cargo manifest: In the event of errors in freight estimations, cargo manifest cor- rections are made. Finally, once the agent has confirmed the cargo’s integrity and quality, plans are made for the subsequent port of call.
E) Vessel’s Sailing
The agents arrange the vessel’s clearance and sailing preparations with the master. Where necessary, pilots are arranged to escort the vessel to the outer port limits. Any outcomes pertaining to ship’s surveys, inspections, repairs, claims, cargo damage, and certificate renewals are forwarded to the ship’s principals, that is, the shipowners or charterers.
Pursuant to the ship’s sailing, the agents gather all the original invoices, vouchers, and supporting documents, and produce the D/A.
F) Ships’ Husbandry, Ship’s Protective Agency, and Ship Management
In maritime law, a protective agent provides ships’ husbandry services and is thereby referred to as “ship’s husband.” As their duties and the duration of their contractual agreements with their principals tends to extend in time, modern shipping agents tend to expand their activities by offering ship management services, thus increasing their involvement and control over the ship’s performance and commercial, technical, and financial operations. An interesting observation of the modern shipping market is the fact that owing to the ship agents’ deep and varied knowledge of shipping, more agencies become involved in relative services, such as crew agencies, ship management, and so on.
G) Ships’ D/As and Incident Investigation
As a conclusion, the examination of a ship’s D/As serves as a most detailed log book that offers ample evidence as to the ship’s overall performance and activities, encompassing its seaworthiness, repairs, inspections, crew changes and health issues, cargo handling operations, and so on. Ideally, a company’s incident investigation should also encompass the company’s accounts.
4.6 PORT-RELATED CLAIMS AND LEGAL LIABILITIES