13. Ship management

Ship management is an umbrella term which comprises various types of management services covering all aspects of daily vessel operations. A shortened version of the definition the Ship management is "The professional supply of a single or range of services by a management company separate from the vessel's ownership" where: "professional supply" means that the supplier (shipmanager) provides service(s) to the user (shipowner) according to contracted terms and in return for a management fee. In doing so the shipmanager is required to ensure that the vessel always complies with international rules and regulations, is run in a safe and cost efficient manner without threat to the environment and is maintained so as to preserve as far as possible its asset value. The shipmanager must also take responsibility for its actions. "A single or range of services" means that the shipowner selects to use a comprehensive range or just one service from a number offered by the shipmanager. These services break down into three main groups: technical management, crew management and commercial management. "Management company separate from the vessel's ownership" means that the supplier of the services is independent from the user working with its own staff and from a separate office. The term separate, in the strictest sense, means that there is no common shareholding interest between the shipowner and the manager.

Hybrid shipowner-shipmanager relationships:

1). The shipowner elects to retain control over a number of critical functions in the management of its ships, including the selection of senior officers, safety auditing and the negotiation and management of dry-docking, while outsourcing the remaining day-to-day ship management activities.

2). The shipowner retains a technical department to run a "core" fleet of, say, bulk carriers, but in acquiring a fleet of specialist vessels, such as parcel tankers or reefers, uses a shipmanager that is able to provide the requisite skills in technical management including the maintenance of tank coatings or of refrigeration equipment, as well as the sourcing of seastaff with the specialist skills and experience relevant to the ship type(s) in question.

3). The shipowner does not have the inhouse technical and personnel staff to handle an unforeseen increase in its fleet, perhaps via an opportunistic purchase. In this particular situation a shipmanager will be used only until the shipowner recruits additional staff to cope with the additional workload.

4). A shipmanager has a shareholding position in a vessel under management or has some kind of equity association with the shipowner i.e. both companies are part of the same group.

Technical Management

The primary objective of technical management is safe, pollution-free and cost-efficient vessel operation in accordance with international rules and regulations and where due consideration is given to the protection of asset value. The various tasks are also interrelated and interdependent. For example, regular vessel inspections by a superintendent provides an input and serves as an output for other service elements including purchasing, reporting, certification, maintenance and budgeting. In similar vein, purchasing has a bearing on vessel inspection, safety and quality management and maintenance