Managing A Ship Management Company

Question: Describe about the Managing A Ship Management Company. Answer: 1 Office Staff 1a.Location of office India Of the three locations namely Glasgow, Singapore and India shortlisted for setting up new office for Informal Ship management Ltd it decided to opt for India as the suitable location. It is based on two factors namely the cost of real estate property of the location and potential for ship management industry. Of the three location the cost per square foot per year is 115 US$ in Glasgow, 130 US$ in Singapore and 85 US$ in India and it is the last option India that provides cost advantage. In addition India holds the 16th position with a coastline of 7517 km and 13 major ports with 95% trade volume in maritime transport. 1b. Official language of the company India is multi linguistic country with many languages but Hindi and English are the most spoken language in the corporate world and majority of people understands, it[1]. In regard to Informal Ship management Ltd it is decided that English will be the Official language of the company. The reason for choosing the language is the parent company is based out of UK and the Indian location Chennai is more comfortable in English than Hindi so it acts as a more effective language for communication. 1cList of job title and members associated For Bulk carrier Job title Members associated Management Master Chief engineer Operational management Chief officer 2nd engineer 2nd officer 3rd engineer 3rd officer 4th engineer Electro Technical officer Supports Staffs Bonus/Store man chief cook OS/Greaser 11 steward AB/Greaser 1 cook For crew Job title Members associated Management Master Chief engineer Operational management Chief officer 2nd engineer 1st officer Cargo engineer 2nd officer 3rd engineer 3rd officer 4th engineer Electro Technical officer Supports Staffs Bonus/Store man chief cook OS/Greaser 11 steward AB/Greaser 1 cook 1d) Bulk Carrier Name Position held Nationality Gross Monthly Salary Gross annual salary Additional Costs(Transportation + training and fringe benefits) Master Indian 5600+1120+168=6888 82656 50+40+10=100 Chief Engineer English 4875+975+146.25=5996.25 71955 50+30+10=90 Chief Officer 2nd engineer Greek 3900+780+117=4797 57564 50+30+10=90 2nd officer 3rd engineer Scottish 2500+500+75=3075 36900 50+30+10=90 3rd officer 4th engineer Australian 1800+360+54=2214 26568 50+20+10=80 Electro technical officer Indian 2400+480+74.40=2954.4 31132.8 50+30+10=90 Chief cook Scottish 1225+245+36.75=1506.75 18081 50+20+10=80 Store man Indian 1225+245+36.75=1506.75 1808.1 20+10=30 Greaser I cook Scottish 1085+217+32.55=1334.55 16014.6 20+10=30 Greaser II steward French 870+174+26.10=1070.1 12840 20+10=30 Oil Tankers Name Position held Nationality Gross Monthly Salary Gross annual salary Additional Costs(Transportation + training and fringe benefits) Master Indian 5600+1120+168=6888 82656 50+40+10=100 Chief Engineer English 4875+975+146.25=5996.25 71955 50+30+10=90 Chief Officer 2nd engineer Greek 3900+780+117=4797 57564 50+30+10=90 1st officer cargo engineer English 3900+780+117=4797 57564 50+40+10=100 2nd officer 3rd engineer Scottish 2500+500+75=3075 36900 50+30+10=90 3rd officer 4th engineer Australian 1800+360+54=2214 26568 50+20+10=80 Electro technical officer Indian 2400+480+74.40=2954.4 31132.8 50+30+10=90 Chief cook Scottish 1225+245+36.75=1506.75 18081 50+20+10=80 Store man and pump man Indian 1225+245+36.75=1506.75 1808.1 20+10=30 Greaser I cook Scottish 1085+217+32.55=1334.55 16014.6 20+10=30 Greaser II steward French 870+174+26.10=1070.1 12840 20+10=30 1e) 1f Cost of the office per years area per feet 10 person reception broad room additional space Total space Sq feet 1200 288 240 1728 Cost of the person per years: - 85* 1728 =$146880 Additional costs for running the offcie = $36155 Additional costs for 10 persons=$361550 For bulk Total cost per year for one 10 persons =$508430 Total costs For 5 bulk carrier per years=$2542150 Monthly costs for office rental for 5 bulk carrier=$211846 For Oil tanker For Crew costs cost for office rental = $508430 Total costs for 5 crew costs per year =$2542150 Monthly costs for office rental=$211846 For both Yearly costs for both crew and bulk are = $2542150*2 =$5084300 Monthly costs for both crew and bulk are= $423691 2 Crew Cost 2a) identification of crewmembers and bulk carriers members Members for bulk carrier Job title Title No of employees Management Master 5 Chief engineer 5 TOTAL 10 Operational management Chief officer 2nd engineer 5 2nd officer 3rd engineer 5 3rd officer 4th engineer 5 Electro Technical officer 5 220 Supports Staffs Bonus/Store 5 man chief cook 5 OS/Greaser 11 steward 5 AB/Greaser 1 cook 5 20 Total members 50 For crew Job title Title No of employees Management Master 5 Chief engineer 5 TOTAL 10 Operational management Chief officer 2nd engineer 5 1st officer Cargo engineer 5 2nd officer 3rd engineer 5 3rd officer 4th engineer 5 Electro Technical officer 5 35 Supports Staffs Bonus/Store man chief cook 5 OS/Greaser 11 steward 5 AB/Greaser 1 cook 5 15 Total members 50 2b) Bulk Carrier Name Position held Nationality Gross Monthly Salary Gross annual salary Additional Costs(Transportation + training and fringe benefits) Total Master Indian 5600+1120+168=6888 82656 50+40+10=100 82756 Chief Engineer English 4875+975+146.25=5996.25 71955 50+30+10=90 72045 Chief Officer 2nd engineer Greek 3900+780+117=4797 57564 50+30+10=90 57654 2nd officer 3rd engineer Scottish 2500+500+75=3075 36900 50+30+10=90 36990 3rd officer 4th engineer Australian 1800+360+54=2214 26568 50+20+10=80 26648 Electro technical officer Indian 2400+480+74.40=2954.4 31132.8 50+30+10=90 31222.8 Chief cook Scottish 1225+245+36.75=1506.75 18081 50+20+10=80 18161 Store man Indian 1225+245+36.75=1506.75 18081 20+10=30 18111 Greaser I cook Scottish 1085+217+32.55=1334.55 16014.6 20+10=30 16044.6 Greaser II steward French 870+174+26.10=1070.1 12840 20+10=30 12870 Total 372502.4 Total cost for five ships = 372502.4*5=1862512 Oil Tankers Name Position held Nationality Gross Monthly Salary Gross annual salary Additional Costs(Transportation + training and fringe benefits) Total Master Indian 5600+1120+168=6888 82656 50+40+10=100 82756 Chief Engineer English 4875+975+146.25=5996.25 71955 50+30+10=90 72045 Chief Officer 2nd engineer Greek 3900+780+117=4797 57564 50+30+10=90 57654 1st officer cargo engineer English 3900+780+117=4797 57564 50+40+10=100 57664 2nd officer 3rd engineer Scottish 2500+500+75=3075 36900 50+30+10=90 36990 3rd officer 4th engineer Australian 1800+360+54=2214 26568 50+20+10=80 26648 Electro technical officer Indian 2400+480+74.40=2954.4 31132.8 50+30+10=90 31222.8 Chief cook Scottish 1225+245+36.75=1506.75 18081 50+20+10=80 18161 Store man and pump man Indian 1225+245+36.75=1506.75 18081 20+10=30 18111 Greaser I cook Scottish 1085+217+32.55=1334.55 16014.6 20+10=30 16044.6 Greaser II steward French 870+174+26.10=1070.1 12840 20+10=30 12870 Total 430166.4 Total cost for five ships = 430166.4*5=2150832 2c. Salary difference in Tanker and bulk carrier tour of duty Tanker tour of duty is normally less than that for bulk carriers and salaries are higher. Informal Ship management Ltd will continue this difference as the salary of the crew members are fixed based on the role and responsibility and not on the tour of duty[2]. They are different for staff working in tanker and bulk carrier with the former undertaking more risk than the later in terms of operation, extra machinery and cargo tank cleaning. 3 Management Fees 3a) affect of person employed and diversity of the staffs In present, 10 members have been selected to perform the operations for one site. Thereby, while operations functions properly then it may be required more staffs to perform operations effectively[3]. Thereby it is stated that this will affects numbers of person employed. As per the diversity concern, it has been seen that office will set up in India; thereby if organization hire more person are from Indian then work culture and performance will be improved. Overall, it has been stated that diversity has not much impact on organization performance. 3b) determine the services for supply and management fees Ship management costs Chennai Technical 4900 Crewing 2700 Fleet supports 1000 Shore premises costs 1000 Miscellaneous expenses 1000 Total costs monthly 107000 Total costs yearly 1284000 3c) Subtracting the annual salary for both the bulk and oil tankers together with the rental from the annual management fees 1284000-(1862512+2150832+2542150) = (-5271494) 3d Companys present state and changes required to increase profit Informal Ship management Ltd is new company and it is in the initial stage in the business life cycle. Thus the management of the company will aim for increasing the profit for the business of the company. The strategies taken for achieving the same will be focussing on the business development aspect both for bulk cargo and for tanker[4]. It will be supported by the operation efficiency of the staff involved and it will done by developing the skill and knowledge of the worker by rigorous training in handling bulk cargo and tanker. The company will focus on the bulk cargo in the Indian market as 95% of export in terms of volume and 70% in terms of value happen by the maritime and it provides huge opportunity for Informal Ship management Ltd to increase the profit and growth the business in the country. 4. From the above three tasks it is evident that the shipping management company named Informal Shipping Management Ltd will be launched in the Indian city, Chennai. This is based on the justification that the cost of the real estate property compared to Glassgow and Singapore of more attractive. In addition India has 13 ports and dispatches 95% of its cargo through the Maritime transport. Moreover, the business language has been chosen as English keeping in mind the linguistic comfort ability of the Chennai corporate culture. The list of job title identified for the bulk carrier are top management, operational management, support staff with job title like master, chief engineer, chief officer, electro technical officer, store man, chief cook and greaser. The same set of crew members are selected from the tanker business as well, the main difference is that the taker business include the cargo engineer. The salary component includes the gross salary, 20% of the full salary for national tax, 3% of the full salary for employee pension together with additional costs that include the transportation costs, training costs and the fringe benefits. The organigram has been depicted exhibiting the potential organizational structure that would be followed by the business. The cost of office per year amounts to 146880US$, the total costs for the bulk carriers amount to $2542150 and for the tanker it is 2542150. The amount that the company would have to pay as the salary for the members for bulk carriers amounts $1862512 and for the oil tanker amount to $2150832. The tanker tour of duty is less than the bulk carrier with high salary. It has been observed that the Informal Shipping Management Ltd also tends to follow the same trend since the tanker crew faces higher risk in terms of operation, extra machinery and cargo tank cleaning. Again, it has been observed that since the company emphasizes upon conducting all the businesses in house without sub contracting any business, the company in order to enhance the efficiency of its operations can recruit more staff members so, that the work load can be reallocated and each individual members would have to work as per their expertise which would allow them to carry out the tasks which are under their own expertise. The diversity would not be affected much. Moreover, the annual fees that would be achieved by the company by offering services like technical service, crewing service, fleet support, shore premises costs and miscellaneous expenses would amount $1284000 and after subtracting the annual salary for both the bulk and oil tankers together with the rental, it is observed that the company would be suffering from loss. The company present state can be defined as an initial stage in the business life cycle of the company and it aims to increase the profit in the fut ure. The company will use the strategy of developing the business and enhancing the skills and knowledge level of the operational staff. The focus of the company will be in the bulk cargo business as India exports 95% of cargo in terms of volume and 70% in terms value through maritime transport. Bibliography Perry, H. (2009).Ship management and operation. New York: Simmons-Boardman Pub. Co. Spruyt, J. (2007).Ship management. London: Lloyd's of London Press. Favre, D., Spruyt, J. and Willingale, M. (2008).Ship management. London: LLP. Guest, A. (2007).Ship management. 2nd ed. London: Lloyd's of London. Woodyard, D. (2009).Ship management. 4th ed. Colchester, Essex [England]: Lloyd's of London. Frankel, E. (2007). Ship management systems developments.Maritime Policy Management, 9(2), pp.135-143. Perry, H. (2009).Ship management and operation. New York: Simmons-Boardman Pub. Co. Dickie, J. (2009).Reeds 21st century ship management. 2nd ed.