Managing Shipping Risk
19th November 2014, The Leela’s Mumbai

Spotlight on 'Overcoming commercial risks' in Shipping

13th Endeavour Creatives seminar draws record attendance

Arunima Sathe

[Mumbai, December 9]

Every business carries an element of risk; the shipping business is no exception. Several factors like the environment, human safety, timely and accurate delivery, taxes and insurance have to be examined, and periodically re-examined, in order to minimise as many risks as possible.

Prime among these are the terms of a charter party, which at times might appear as minor detail but at a later stage prove detrimental to the ship's final yields. 

In times of poor earnings the difference between profitability and loss is perhaps only the ability of the company's managers to foresee and overcome commercial peril in the business contracts.

Endeavour Creatives dedicated their 13th seminar to this vital topic; the popularity of these knowledge-enhancing seminars made obvious from the record attendance of 135 from across the commercial shipping, which included several speakers and delegates from Hong Kong, Dubai & Singapore.

After the enchanting lamp-lighting ceremony, Capt Kamal Chadha - CEO & Founder of Endeavour Creatives- introduced the Chief Guest Shri PK Srivastava, Director, Essar Group.

Shri PK Srivastava shared his knowledge and experience with the audience in a very engaging manner. He discussed the need for new investments in shipping, categories in which risk can be divided, anticipating malignity, and - briefly - shipping fraud.

"This topic has been affecting the industry since its inception. Every business including shipping has risks. It can be an internal or environmental risk. What matters more is how we anticipate these risks. Unless you understand the nature of the risk, you will not be able to anticipate it. Due diligence is an integral part of success," he said.

Speaking on the shipping market, he noted, "Shipping is a long term business, year to year progress is not always possible here. New entrants must think of staying in for the long haul, because ultimate rewards in this trade are very satisfying. Keep in mind that shipping plays a major role in the world's economy; and this business will never become extinct."

"Shipping is the only economically feasible and environment-friendly mode of transport for international trade. It is a global asset; making it environmentally friendly and fraud-free is our responsibility", he added.

Mr Jagmeet Singh Makkar, Co-Head Noble Chartering and Global Head of Shipping Assets, Hong Kong, highlighted the conditions in the shipping markets. He said that the markets were going to see good days ahead and discussed the changes in the markets. He concluded his talk by highlighting the profits that can be generated by a reduction in oil prices.

Capt Govind Kumar Gautam, CEO of Pacific World Shipping Pte Limited, Singapore spoke on the owner's and the charterer's perspectives on accidents and operational risks. He discussed a few shipping accidents with case studies during his speech, highlighting the areas in which managers ought to exercise great vigilance, especially the documentation of contracts.

With 42 years of experience in the industry, Capt Richard Creet - Managing Director, Trident Management Services (S) Pte Ltd Singapore - debated the difference between time and voyage charters, taking the audience on a journey of knowledge, information and guidance on how these two different types of contracts yield advantages, and wherein lie hidden the difficulties in them.

Post lunch, Mr CK Sharma- whose vision remarkably includes his intent to keep improving his knowledge on a daily protocol, and who is the co-founder of Endeavour Creatives and its Academic Advisor for over 8 years now - held a shipping quiz that all participants enjoyed, and learnt from, thoroughly.

Mr Sharma continued to provide words of wisdom for good management of documentation, and avoiding maritime fraudsters. He shared some hitherto-untold real life stories to make his points amply clear. He spoke of the perils in shipping and some of the factors that contribute to shipping fraud- lack of due diligence, not reading the contract document carefully, ambiguous documentation. Further, he discussed the types of fraud that included non-existent or defective cargo, non-existent ship, non-existent parties to contracts, negotiation of shipping terms by non-shipping people, trickster ship operators, and documentary fraud.

Keeping in mind the importance of health, the organisers had invited Ms Tripti Gupta, a lifestyle nutrition consultant, who guided the delegates on the 'gangway to health'. A food lover herself, she advised the audience to maintain a balanced diet and emphasised the importance of mental fitness in keeping physically fit.

An open house session was held with panellists Capt Rahul Bhargava, Head of Chartering and Operations, Essar Shipping Ltd, Mumbai, Mr MK Palanivel, President- All India Bulk division, Samsara Group, India and Mr Ashok Jain, Managing Director, Diamond Ship Brokers Pvt Ltd, who answered queries from delegates.

The knowledge-packed day ended with a prize distribution ceremony.

Mr Alok Shirodkar, CEO, Krunch Today, gave the vote of thanks.

Marex Media

BOX 1

IMPACT

  •  "It is a wonderful informative forum. Some of the elite from the industry have guided us on the hot topic of risk management. An interactive audience made the seminar so much more interesting"
    - Mr Sajjid Haider Pasha, Director Shun Shing Group.

  • "The selected theme is extremely relevant and the amount of knowledge everyone is gaining here is priceless. I feel such initiatives are unique and should be taken often for betterment and progress"
    - Kamal K Seth, President and Chief Executive Officer, Reliance Infrastructure Limited. 

  • "This is a very interesting initiative- a good knowledge-providing seminar for all. The dedication of the organisers is so evident, and the topics are very relevant to the prevailing times"
    - Capt Govind Kumar Gautam, CEO of Pacific World Shipping Pte Limited.

BOX 2

In Conversation
Shri PK Srivastava, Director, Essar Group

Your comment on managing shipping risk…
Shipping is a long-term business, so taking risks and overcoming them is a part of the business. One must understand the nature of risk before managing it. Anticipating risks, and a prudent manager must be able to do this well, is a big factor in risk management.

Would you say that the take-away from here would help delegates to overcome some commercial perils related to their work?
There are few seminars completely dedicated to learning. In this sense the initiative taken by Endeavour Creatives is very unique. This is a place where you can generate awareness. This initiative provides a platform for sharing and learning.