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Maritime News for Filipino Seafarers

Abandonment issue gives shipmanagers a chance to shed ‘spiv’ image

Abandonment issue gives shipmanagers a chance to shed ‘spiv’ image
Andrew Craig-Bennett October 11th 2017

The announcement by the eight big shipmanagers that they propose not to do business with owners who have a history of abandoning crew is a good start, but now let’s ask for more from these men.

There is only one reason why an owner ‘walks away’ from a ship, abandoning the crew, and that is because the owner has no money to pay his creditors with.

We all know that such an owner may subsequently discover some hidden resources, often in the property market, and buy another ship or ten, once freight rates improve, but competent shipping services providers, be they bunker suppliers, insurers, spares suppliers, financiers or indeed shipmanagers, are aware of our industry’s long standing tendency to ‘pay with the mainsheet’. They track people who don’t pay, and will be aware that their creditworthiness is suspect. To refuse to do business with someone who leaves bills unpaid is just common sense, and all the big shipmanagers carry out credit checks on new principals.

If you think about how our business operates, from the agent sending out his preliminary disbursements account, via all the forms of dry cargo charter party, through all insurance documents, to every shipmanagement agreement that I have ever seen, the whole of shipping, with the important exception of the tanker trades, is built on ‘In God we trust, all others, cash’ – and specifically ‘cash in advance’.

(Tankers and OSVs are different because Big Oil makes the rules, and Big Oil is not only solvent but understands the concept of cash flow and the benefits of using its contractors’ cash).

The very term ‘to pay with the mainsheet’, meaning to ‘forget’ to pay a supplier, obviously dates back at least 150 years, since merchant ships have not needed mainsheets for a while. The law of most nations puts the claims of the crew for outstanding wages ahead of other creditors, so this, too, suggests that seamen have been going unpaid for a few centuries now.

So the seeming magnanimity of the eight big managers is just routine business practice.

There is something that the managers can do, if they really want to help deal with the issue of crew abandonment, and that is to always do the decent thing and pay outstanding wages and repatriate crews themselves.

In fairness, some of the big managers already do this, on a case by case basis, but they like to keep quiet about it, perhaps because their shareholders would question the need to do so, or perhaps because they don’t want to look foolish in the eyes of their competitors. It would, I am sure, be very wrong of me to think that they only do so when their name might come out.

There is something undignified about large commercial enterprises with a global reach choosing to hide behind the law of agency, when confronted by an unpaid seaman, far from home, who thought, up to that point, that he was working for them.

Seamen who work for the big managers usually think – and will always tell you – that they work for the manager, not for Wideboy Shipping Inc of 80, Broad Street. It isn’t much fun for them, or their families, to suddenly find out that they have been working for Wideboy Shipping Inc after all, at the moment when they find their allotments haven’t been paid.

So I have a modest proposal for the big managers. These are companies who are very keen on being taken seriously and are anxious to finally shed the reputation as ‘spivs’ that they acquired around about the time that they stopped calling themselves ‘ship’s husbands’ – a term which disappeared at about the same time as the mainsheet. This can be another small step on the road to respectability that started with the late David Underwood.

I suggest that the Magnanimous Eight simply announce that they will, in all cases, follow the famous old rule of the KGB, and always get their men back. If the KGB, an organisation that enjoyed an even worse reputation than shipmanagement, could do it, I am sure the upright gentlemen in charge of today’s shipmanagers can do it too.

After all, in the case of a ship flying a flag which applies Regulation 4.2, Standard A4.2.1 paragraph 1(b) of the Maritime Labour Convention 2006, which is most of them, they can claim the cost of repatriation from the P&I Club.

Let’s see a statement by the eight big shipmanagers that they will always pay wages, including allotments, as soon as they are due, and that they will always repatriate seamen working onboard ships under their management promptly in the event that a ship under their management is detained by creditors of the owner.

That would be worth something.