What does a shipping company actually do?
A shipping company in general is a company dedicated to maritime transport. The business reality behind the term is a complex interplay of several roles.
Shipping companies can specialise in specific tasks or handle all relevant functions themselves. The three key responsibilities include:
1. Ship ownership
According to the German Commercial Code, a shipowner is the owner of a commercially operated ocean-going vessel. Shipowners rent out their ships (chartering) or offer transport services directly (shipping). Purchasing and selling vessels can be an additional business activity.
2. Ship management
Ship management comprises the activities involved in the actual operation of a ship. A distinction is made between:
- Technical management: maintenance, servicing, safety management, equipment, and certificate management.
- Commercial management: commercial control, operating cost accounting, voyage revenue management, insurance, reporting to owner.
- Crew management: recruitment, deployment and support of seafarers, often managed internationally, using owned training centres.
Ship managers frequently manage third party-owned vessels in addition to their own ones. Independent ship managers (ISMs) are contractors performing any of the above tasks as a service to owners.
3. Transport services – liner and tramp shipping companies
Many shipping companies manage the transport of goods themselves, either on set schedules (liner operators) or responding flexibly to demand (tramp shipping), using their own vessels and/or chartered ships.
CONCLUSION
Shipping companies may specialise in specific activities or perform all of the above tasks themselves. The English terms shipowner, ship manager or ship operator distinguish between these activities, while the German term “Reederei” denotes any combination of business activities.
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Carsten Duif
Press- and Communications Officer
+49 40 35097-238