Joint Ventures /Shipping Pools /Parceling /Project Cargo
Joint VenturesA joint venture is a method of employment where a shipping company and a cargo owner come together to produce and then export cargo. In this method the role of the shipping company is to transport the cargo, while the cargo owner produces the goods for export. The goods are sold after export and the profit earned or the loss incurred is distributed between the cargo owner and the shipping company. This distribution will be based on a weighting system as negotiated.
A joint venture could either be for a short duration, or for a long period of time.
An example of a joint venture is the liaison between the shipping company Klaveness group and the Guinean Government in the production, transportation and marketing of the ore ‘bauxite’.
Shipping PoolsAs most contracts of affreightment and joint ventures require a large pool of ships to transport cargoes, sometimes a group of ship owners band together to ‘pool’ their tonnage and collectively market their combined fleet to secure these employment contracts. This method of employment, where a group of ship owners collectively market their fleet to secure an employment contract, is called a ‘shipping pool’. The income collected from vessels in the pool is called pool income.
Running costs are deducted from the collected pool income, and the residual income is determined. Residual income is then distributed among members of the pool by a ‘weighting’ system. This ‘weighting’ system will be based on vessel characteristics etc.
This system has several advantages and these include lower overhead costs and fewer risks for the ship owner.
ParcellingSome ship operators specialise in transporting smaller parcels of a commodity by grouping them together in a vessel sailing from one or more ports in a particular region to one or more ports in another area.
These operators group these parcels in one vessel. Freight rates that cargo owners are charged for these parcels are competitive and lower than if the cargo owner were to ship these parcels as a single quantity on, say, a liner vessel. The operator makes a profit by time chartering a vessel at a lower hire than the total freight that he receives from all the parcel owners.
Parcelling is quite common in Australia and the Far East.
Project CargoesThese types of contracts are normally secured by heavy lift vessels to transport what are known as ‘project cargoes’. These could be large prefabricated structures like turbines and other forms of machinery and/or material that is required for the construction of a power plant, for e.g.
In this venture a marine specialist undertakes complete responsibility to transport materials and equipment.