Organizational Structure of a Shipping Company

Shipping companies use an organizational structure to increase efficiency in their operations. Shipping companies use an organizational structure to help outline the functions of their company. This structure can be centralized around one individual or decentralized, allowing several individuals some responsibility.

. 1. Features A common shipping organizational structure separates business functions by type, such as administrative, accounting, technical and shipping, among others depending on the company's size. Publicly held companies will have a board of directors as their top management level. 2. Purpose An organizational structure creates a system for individuals to observe and follow when making decisions, allocating resources or adding new shipments to their operations. International shipping companies may also have an international division in the structure to run these operations.

Considerations While executive officers typically govern the top-level manager of each division, they may also have some authority over the fleet of ships involved in the operations. This allows the executive officers to make changes in their operations as needed to adjust operations according to current economic conditions.

Organisation Structure

Organization Structure

Ship management When a ship is purchased for importing and exporting goods, a ship management team is required to maintain and operate the vessels. The function of the management team is to provide the owner with support throughout the occupancy or charter of the vessel. Vessels can range in sizes and function.

Most Management companies provide the owner or operator with crew on board. When the ship comes out of the Ship Yard (where the ship is built) the management company takes it over providing technical support to the owner. Most Management companies also offer other services as inspection prior to purchase and supervision during building. capitalization The amounts and types of long-term financing used by a firm. Types of financing include common stock, preferred stock, retained earnings, and long-term debt. A firm with capitalization including little or no long-term debt is considered to be financed very conservatively

Market Capitalization The total value of all outstanding shares of a publiclytraded company. The market capitalization is calculated by multiplying the shares outstanding by the price per share. Market capitalization is one of the basic measures of a publicly-traded company; it is a way of determining the rough value of a company. Generally speaking, a higher market capitalization indicates a more valuable company. Many exchanges and indices are weighted for market capitalization. It is informally known as market cap. See also: Large cap, Mid cap, Small cap.

Definition of 'Capitalization' 1. In accounting, it is where costs to acquire an asset are included in the price of the asset. 2. The sum of a corporation's stock, long-term debt and retained earnings. Also known as "invested capital". 3. A company's outstanding shares multiplied by its share price, better known as "market capitalization". Investopedia explains 'Capitalization' 1. For example, if a machine has a price of $1 million this value would be recorded in the assets, if there was also a $20,000 charge for shipping the machine then this cost would be capitalized and included in assets. 2. The capitalization of a firm can be overcapitalized and undercapitalized, both of which are potential negatives. 3. If a company has 1,000,000 shares and is currently trading at $10 a share, their market capitalization is $10,000,000. Shipbroking is a financial service, which forms part of the global shipping industry. Shipbrokers are specialist intermediaries/negotiators (i.e. brokers) between shipowners and charterers who use ships to transport cargo, or between buyers and sellers of ships. Some brokerage firms have developed into large companies, incorporating departments specialising in various sectors, e.g. Dry Cargo Chartering, Tanker Chartering, Container Chartering, Sale & Purchase, Demolition and Research. Other "boutique" companies concentrate on specific sectors of the shipping market. The principal shipping and shipbroking centres are London, New York and Singapore. Tokyo has a longstanding tradition in shipping/shipbroking, which is now more focussed on Japanese domestic trade. Other places continue to develop

in international shipping services, such as: Hong Kong, Shanghai, Delhi and Mumbai; Copenhagen, Geneva, Genoa, Hamburg, Oslo, Paris and Piraeus in Europe; and in North America, Connecticut, Houston and Montreal are important shipbroking centres. Until recently, it was commonplace for shipbrokers to cover more than one discipline, although nowadays the vast majority of shipbrokers specialise. The Institute of Chartered Shipbrokers sets educational standards throughout the industry, Fellowship of which is considered a great honour. Shipbroking can be categorised as follows: Contents

1 Sale and purchase 2 Dry cargo broking 3 Tanker broking 4 Container broking

Sale and purchase S&P brokers handle the buying and selling of existing or new ships (called newbuildings, in industry parlance). S&P brokers discuss opportunities and market trends with shipowners, report on sales, value vessels, calculate freight earnings, advise on finance and endeavor to find ships for specific employment opportunities. When a ship is sold, brokers usually negotiate on behalf of the buyer and seller on price and terms and also provide a route to resolving any disputes which might arise. Some S&P brokers specialize in the sale of ships for scrapping, which requires a different set of skills. Dry cargo broking Dry cargo brokers are typically specialists in the chartering of Bulk carriers, and are appointed to act either for a shipowner looking for employment for a ship, or a charterer with a cargo to be shipped. Dry cargo chartering brokers have to maintain large databases of vessel positions, cargoes and rates and pay close attention to the direction of the markets so that they can advise their clients accurately as to how to

maximize profits or minimize expenses. Dry cargo shipping can be categorized by Vessel size: namely, Bulkers such as Capesizes, Panamaxes and Handysize are the main sectors. Each size of vessel suits different types of cargo and trade routes. Thus owners, charterers and brokers tend to specialize in one or other of these sectors. Tanker broking Tanker brokers specialize in the chartering of Tankers, which requires different skills and knowledge from Dry cargo broking. Tanker brokers may specialize in crude oil, gas, oil products or chemical tankers. Tanker brokers negotiate maritime contracts, known as Charter Parties. The main terms of negotiation are freight/hire and demurrage. Oil being a fast moving trade, freight rates for crude oil tanker charters are most commonly based on the Worldscale Index; the Worldscale Association publishes flat rates annually. Some specific voyages, such as named voyages (i.e., from A to B) and for specialist ships, like LNG tankers (a highly specialized sector of the tanker market), freight rates can be agreed at a fixed rate between the parties. Container broking Container brokers specialise in the chartering of container ships and provide container ship owners and charterers with market-related information.