Fostering multi-faceted agency relationships

The relationship between the port and an agent is described as “symbiotic”. Credit: Anupong Sakoolchai,123rf
The relationship between the port and an agent is described as “symbiotic”. Credit: Anupong Sakoolchai,123rf
Agents bring specialist knowledge to the port. Credit: Wathit Kettap, 123rf
Agents bring specialist knowledge to the port. Credit: Wathit Kettap, 123rf
Agents should be involved in port user groups. Credit: Anek Suwannaphoom, 123rf
Agents should be involved in port user groups. Credit: Anek Suwannaphoom, 123rf
Industry Database

Ship agents and ports have the same interest in ensuring efficient and effective ship operations. Felicity Landon reports.

What do agents really want from port authorities and port/terminal operators in the places where they work? A quick 'ask around' comes back with words like respect, communication, dialogue - together with a bit of a feeling that ship and port agents aren't always appreciated for what they bring to the party.

Perhaps the best way to describe the relationship between port and agent is “symbiotic”, says Neil Godfrey, group sales director of GAC.

“The agent certainly needs the port to provide services and information on time, to enable the agent to deliver a good service to his customer, the shipowner/operator,” he says. “As an operator of infrastructure, the port possibly needs the agent less than the other way around, but certainly does need the agent to operate within the port area in compliance with all port HSSE and other regulations. It is very much a professional relationship and a good one should be based on mutual respect and sound communication.”

Of course, the relationship varies from port to port, he says. “In the case of smaller ports, they will often invest more time in building relations with the agent community, (a) to enhance operational efficiency and (b) in the hope that the agents can assist in building business/volume for the port.”

And that is a critical point. Jonathan Williams, general secretary of the Federation of National Associations of Ship Brokers and Agents (FONASBA), points out that the role of the ship agent falls into two categories. The port agent handles the vessel while in port, organising services and ensuring the vessel's stay is effected as quickly and efficiently as possible. The liner agent is responsible for booking cargo for regular liner services and this role is therefore focused on the commercial side of the operation. Most liner agents also provide port agency services for the vessels operated by the lines they represent.

Hidden benefits

In response to Port Strategy's questions about agent-port relationships, Mr Williams gathered the thoughts of members, including FONASBA president John Foord.

Many ship agents bring a lot of business in to ports and ports can easily forget this, he says.

“This primarily relates to liner shipping, where a number of ports may serve a common hinterland and are competing with each other for ship calls. An active, successful liner agent will be able to generate sufficient cargo to encourage the port to be included in the line's schedule, perhaps at the expense of a competitor. Subject to sufficient volume being generated, the agent will then be able to negotiate advantageous rates for ship calls and, by so doing, encourage even more business through the port.

“An effective agent will also work closely with shippers to ensure that their needs, in terms of slot capacity, cargo types and handling requirements, shipment frequencies and similar are noted and passed on to both the port and the line in order to ensure that the shippers' business can be accommodated, to the benefit of all parties. In the same vein, ports can and do use agents to support and promote their activities and facilities and to keep the lines informed of issues, developments and similar.”

Occasionally, the port forgets that it was the agent that brought the line to the port and may try to cut the agent out of ongoing discussions or negotiations, says Mr Williams. “To the credit of many lines, if this occurs the line will refer the port back to the agent as their de facto representative in the port.”

In an ideal situation, he says, a port should recognise, respect and value the roles of the port and liner agent and appreciates the positive impact of having committed, effective and professional agents working in harmony with it.

“Agents have a wealth of knowledge and experience and, in the case of liner agents, business they can bring to the port community - and the port operators should welcome this.”

Regular briefings from the ports on overall status and development plans are always appreciated by the agent community and help to build relationships, says GAC’s Mr Godfrey. “Something else I think the agent community would appreciate is early notification from ports when they plan to outsource any services, so the agents can consider such opportunities and see if they would fit into their own business/service portfolio.”

However, he says: “Automation of the processes for notification and clearance of vessels, entering/leaving ports, and so on should be a positive development in terms of simplifying operations but could dilute port/agent relationships in the long run.”

Port user forums

Clearly all ports need to have some knowledge of the role and responsibilities of the ship agent in order that the physical movement of the vessel through the port can be carried out to the advantage of all concerned, says Mr Williams. “That said, it would be hoped that agents will also be represented on port user and other similar consultative bodies and that these provide opportunities for the various parties to exchange views and engage in more detailed discussion on specific matters. There are occasions where the operational needs of the port and ship diverge - for example, in times of high port or berth utilisation, where the port may decide which vessels to berth when. With the agent endeavouring to achieve the best outcome for the ship owner in terms of minimising waiting time at the anchorage or berth, this can lead to disagreements, but provided there is full disclosure, as well as mutual respect on both sides, such disagreements can be resolved.”

Here, a port can use its port users' group (or similar) as an effective way of maintaining constructive dialogue with all port users; it should note and respect the feedback and where possible, act upon it, he says.

“Unfortunately, some ports only see these groups as operating one way - that is, from the port to the users - and do not allow constructive and open dialogue. With their experience of all aspects of the ship/port/cargo interface, agents often take a much broader view of the whole operation than the port or other service providers and so can act as a 'critical friend', bringing another viewpoint to expand the discussions.”

Overall, Mr Williams believes that the port-agent relationship generally isn't changing, although changes to the ownership or structure of a port may impact on the commercial activities of the liner agent - for example, where the port or terminal is taken over by a line or if a decision is taken to shift the focus of the port's activities. “Clearly this may bring changes to the commercial activities, but as a result of the close and regular dialogue between the parties, such developments can be discussed at an early stage and any specific issues ironed out,” he says.

From a purely FONASBA perspective, he adds: “We would like to see ports joining ship owners and operators in recognising and supporting agents that have the FONASBA Quality Standard, in the knowledge that those agents have committed themselves to the provision of high quality and fully professional service levels to their principals and others in the maritime transport chain.”



PREJUDICING AGENCY INDEPENDENCE

Port operators and port authorities often forget that the role of the ship agent is to serve the best interests of the vessel owner and operators and provide a crucial interface between all parties concerned, says Richard Platts, group head of marine at Kestrel Liner Agencies.

Hence, Kestrel is concerned about the increasing trend of port authorities and port operators offering to provide ships agency as an integral and in-house part of their port cargo services, “prejudicing the independence of the agent's role”, says Mr Platts.

“Where they are doing that, they are trying to have their cake and eat it,” he says. “The increasing number of privately owned ports and terminals that are placing restrictive ships agency covenants in cargo handling contracts prejudices the right of the shipowner to be provided with an economical and independent service where the interests of the vessel are served first. I am aware that this is happening in quite a lot of places.”

Agents are there to provide the best possible service to the shipowner, says Mr Platts. “Ports are often more interested in getting the vessel on to the berth and off again rather than getting the chief engineer to the dentist.”

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