Management Contracts

Ship management contracts are agreements between a shipowner and a ship management company, where the latter agrees to provide various services related to the operation and maintenance of a vessel. These contracts can be broadly categorized into:

1. Management Contracts:

These are comprehensive agreements that cover a wide range of services, including:

• Technical Management: This includes ensuring the vessel’s seaworthiness, maintenance, repairs, and compliance with safety and environmental regulations.

• Crew Management: This involves recruiting, training, managing, and paying the crew, as well as ensuring their welfare and compliance with labor laws.

• Commercial Management: This covers activities such as chartering, cargo booking, and voyage planning to maximize the vessel’s profitability.

2. Technical Management Contracts:

These contracts focus specifically on the technical aspects of ship management, such as:

• Maintenance and Repair: Planning and executing maintenance and repair work, including dry-docking.

• Inspection and Survey: Arranging for inspections and surveys required by classification societies and flag states.

• Supply of Stores and Spares: Procuring necessary stores, spare parts, and equipment for the vessel.

• Compliance with Regulations: Ensuring the vessel complies with all applicable safety, environmental, and other regulations.

3. Crew Management Contracts:

These contracts deal exclusively with the management of the vessel’s crew, including:

• Recruitment and Selection: Recruiting qualified and certified seafarers.

• Training and Certification: Providing necessary training and ensuring crew members hold valid certificates.

• Payroll and Administration: Managing crew payroll, benefits, and other administrative matters.

• Crew Welfare: Ensuring the well-being of the crew on board the vessel.

4. Commercial Management Contracts:

These contracts focus on the commercial aspects of operating the vessel, such as:

• Chartering: Finding suitable charters for the vessel and negotiating charter party agreements.

• Cargo Booking: Securing cargo for transportation.

• Voyage Planning: Planning efficient and cost-effective voyages.

• Insurance and Claims Handling: Arranging insurance coverage and handling claims.

Key Elements of Ship Management Contracts:

• Scope of Services: Clearly defining the services to be provided by the ship manager.

• Responsibilities and Liabilities: Specifying the responsibilities and liabilities of both the shipowner and the ship manager.

• Performance Standards: Setting performance standards for the ship manager.

• Fees and Payment Terms: Defining the fees payable to the ship manager and the payment terms.

• Duration and Termination: Specifying the duration of the contract and the conditions for termination.

• Insurance and Indemnity: Addressing insurance requirements and indemnity provisions.

Standard Ship Management Contracts:

BIMCO (Baltic and International Maritime Council) has developed standard ship management contracts, such as SHIPMAN, which are widely used in the industry. These standard contracts provide a balanced and comprehensive framework for ship management agreements.

Ship management contracts are essential for shipowners who wish to delegate the management of their vessels to specialized companies. These contracts ensure the safe and efficient operation of vessels while allowing shipowners to focus on their core business activities.