The “R” in VDR stands for “Reeder”. This is translated into English as “shipowners” for the sake of convenience, but the German term is actually a bit more complex. For example, when using the German word “Reeder”, it isn’t always clear if the owner of an ocean-going vessel is being addressed, or if a reference is made to a shipping company, a contract shipping company, a ship managing company, a ship operator, a time charterer, carrier, shipper, etc. Plus, the different shipping activities overlap in many companies – which can frequently lead to some confusion.
There are three main areas that can distinguish a “Reederei”, the umbrella term for a “shipping company”. First, ship ownership lies at the core of the term “Reeder”. This is also legally defined in Section 476 of the German Commercial Code (Handelsgesetzbuch): “Reeder means the owner of a ship who operates it in order to pursue marine navigation as a gainful economic activity.” An entrepreneur becomes a Reeder if he or she has a financial stake in a ship. The core of the business model of a Reeder is either to charter out (rent) the ship or whole fleet for a set period of time or to offer the transport services of the ship or fleet (load) him- or herself. Ideally, the Reeder also makes some of his or her profit by buying and selling ship(s) at the right time.
The second relevant area is ship management (Bereederung). Ship management is understood as entailing the outfitting, manning and technical maintenance of a ship. A distinction is usually made between technical management, commercial management and crew management. The ship manager is also referred to as the “contractual ship managing company”.
Technical ship management entails taking care of all technical aspects of a ship. In this case, a team of engineers, navigators and technicians ensures the nautical and technical operational readiness of the vessel(s). This includes the regular maintenance and upkeep of the ship itself as well as the systems and equipment on board in accordance with national and international standards and regulations. Thus, the procurement and supply of spare parts, provisions, paint, etc. are also among the central tasks of technical ship management. It is becoming more and more challenging to prepare and carry out the regularly required inspections (audits) as well as to remain in compliance with all other (legal) regulations. The ship management company also has to take care of a lot of paperwork. For example, it has to continuously monitor and check the certificates of the ships under its management to make sure that they adhere to the relevant legal requirements of flag states and navigated areas.
Commercial ship management, on the other hand, entails taking care of the business-related aspects of a vessel. This includes preparing the operating costs and utility bill and the accounting for voyage orders and charters, and it usually also involves the important matter of looking after the ship’s insurance coverage and interacting and co-operating with the insurers. Lastly, the commercial manager submits regular reports to the owner(s) of a vessel.