Inchcape Shipping Services (ISS) has been traditionally very strong in the liquids and gas markets in China but is expanding fast in dry bulk, which has become a massive industry over recent decades thanks to China’s economic boom. Here, ISS China’s David Young, Area General Manager, Northeast Asia, and Joseph Shi, Operations Manager Dry Bulk, shed light on the agent’s role in managing port calls and some common challenges they face.
In a nutshell, Inchcape’s chief task as a shipping agent working for dry bulk customers is supervising cargo operations and ensuring an efficient port call. “As the agent we handle all in-water formalities to ensure the smooth berthing of bulk carriers in port and the safe and efficient discharge of their cargo. This includes managing all related documentation, such as bills of lading (BLs), and ensuring compliance with regulations. We then take care of cargo loading and all the outward formalities related to a vessel’s departure,” David Young explains.
ALL-ROUND SUPPORT
Inchcape also offers extended services such as supporting vessel masters with port captain functions including cargo stowage, draft issues and discharge planning. “The port captain is especially relevant when handling valuable cargoes and for planning the discharge of multi- part parcel cargoes in different locations. We also arrange ship surveys and inspections including off-hire surveys when a vessel is redelivered from charter, as well as follow up supply chain issues thanks to our local presence in ports both in importing and exporting countries,” Young adds.
Husbandry issues are also in Inchcape’s remit if requested by the vessel owner or operator. These range from simple provisioning or organising a crew change to delivering spare parts, arranging for onboard repairs and organising bunkering.
STRONG CHINA PRESENCE
In China, Inchcape employs 64 people and is responsible for managing approximately 5,950 port calls annually on behalf of major global charterers. The chief dry bulk import commodites are iron ore, coal and grain. “We have our own offices in Dalian, Tianjin, Shanghai, Guangzhou and Qingdao, but supervise local agents handling cargo operations in other locations. A particular advantage of working with Inchcape is that we can act as a single contact point for client vessels calling anywhere in the country. There are over 70 ports in China and we cover all of them,” Young says.
“Procedurally, customers typically approach us when they have, or are about to, fix a vessel to ascertain the estimated costs for a particular port call. Based on our comprehensive local knowledge, we will provide them with a pro forma DA (disbursement account) detailing those costs. They then appoint us as the protective or sole/general agent for the port call.”
Cargo receivers generally nominate their own preferred agents in local ports, whom Inchcape then appoints as sub- agents subject to its supervision.“The local agent’s focus is protecting the interests of the receiver or shipper but we need to look after our own client’s interests. If cargo ops are suspended for some reason, for example a stowage issue or problem with the ship’s gear, we need to keep close tabs on the sub-agent in order to safeguard our own customers,” Young says.
‘PEACE OF MIND’
Shi stresses that working with a global agency provides foreign principals with peace of mind, thanks Inchcape’s robust governance and compliance procedures, local insight and fast response time. “In each region we have a Regional Operations Centre where customers can send inquiries and get feedback usually within the same working day. It’s also far easier for customers to use one provider, with a single statement of account, than having to deal with multiple different agents in different ports.”
This approach also mitigates risk. It is not uncommon for critical errors to occur with the local receivers appointed agents – for example releasing a cargo without the original BLs. “Such cases can end up in smaller shops declaring bankruptcy. Unfortunately, they often continue to trade but under a different name, making it very tricky for foreign litigants to recoup their losses,” says Shi.
TYPICAL CHALLENGES
One key operational challenge in dry bulk shipping is that there can be a lot of schedule changes while vessels are at sea that will impact cargo operations. “This might lead to congestion at ports and competition for berths, while issues such as labour disputes and equipment problems can further complicate matters,” Young says. “In these kinds of scenarios, it is crucial to constantly monitor schedules and communicate with both port administrations and receivers to seize opportunities for berth availability. This demands strong mathematical skills and a sharp mind.”
Other potential glitches include damage to a vessel during cargo operations, which is a particular risk in shuttle operations using grabs. “In the event of an incident, we have to coordinate with the ship owner, charterer and whatever party has been responsible for the damage. And vice versa, sometimes there can be impurities in a cargo that might cause damage to a conveyor belt. All these kinds of small things we are trained to look out for and handle,” says Shi.
“Working as an agent on the ground can be stressful, but it’s fun as well. You have to juggle a lot of balls while interacting with all sorts of different people. My motivation is providing the best possible service to our clients,” he adds.
AMBITIOUS FOR GROWTH
To give a sense of the quantities Inchcape is responsible for, in 2023 it handled a total of 46 port calls for coal with a total volume of 3mt (million metric tonnes). In grain, it handled 25 shipments during the year with a total volume of 1.5mt. On the iron ore front it manages around 50 port calls per month for a major iron ore producer in Brazil, with a total volume of around 7mt, and 60 monthly shipments for a major iron ore producer in Australia with a total volume of around 10mt.
“These volumes are substantial but capacity-wise we are eager to do more, backed by our solid reputation in the market as a trustworthy, long-term partner,” Young concludes.
Published by Dry Cargo International on February 28, 2024.