Chapter 1

OWNER, MASTER SND THE VESSEL

The name SHIPMASTER is a well established and honorable title.
Manage well in competitive shipping industry is not easy because markets are constanty changing,
companies developing, ships are getting older and new mdern are beeing built.
Qulities which make an effective shipmaster today are skills which he can apply to improve economic
performance of the ship.
The good master-owner-manager relationshim is essential for success.
Good shipmaster needs to have following skils:
-he needs to contribute to the company
-he needs to adapt quickly to changing circumstances
-and manage all aspects of the vessel of which he must be more than just a driver.
Traditionaly, the master is responsabile to the shipowner.
OWNER can be financed by private or public capital or the shareholder who will expect to see a proper
return on their investment.
If the company is being financed by a bank loan, the owner have to pay off the loan before he can make a
profit to reinvest in the future.
To make the righ balance between the costs, a master needs to know how the owner wants to run his
vessel.
In most cases the master does not even know who the owner is.
There are many owners who uses management companies to protect their anonymity.
Successful company is the one which has good co-operation between those who play their role ashore and
those at sea.
MANAGEMET is the process of involving people and resurces to achive a given objective.
To be successful the master must be able to provide:
-effective working practise
-control
-leadreship and motivation.
MOTIVATION is more difficult to provide but a leader can expect support if people know what they
are trying to achieve and if they are alter rewarded for good performance.
LEADERSHIP is an essential quality for the shipmaster, and the social, cultural, tehnical and economic
environment effect a lot on the shipmasters way of taking leadership position.
But managing the commercial activities of the vessel is a central theme of this book and of the
shipmasters role.
Commercial management for shipmasters is part of The nautical institutes programme for improving
operational effectiveness at sea.
Shipmaster needs to understand that all shipping operations are conducted for commercial reasons.

Chapter 2
MANAGEMENT
Generally, management are practical ways of achieving the best possible results from ore valuable
resource-people.
The masters chalange is to achieve this within a limited period of time and against a multi-cultural
background.
Management techniques are transferable and can be applied eqally well ashore and at sea.
The modules of management cover:
-setting objective and planing
-running effective meetings
-managing time
-solving problems and making decisions
-leading and motivationing staff
-coaching others
-delegating
The crew on board every vessel is arranged into a more or less traditonal organisationSome of these grouping will be passive, and some active.
The masters challange is to built this various grouping into an effective and cohesive team which will
assist and support him in managing the vessel in the moste conomic way.
For master is really important to know himself thoroughly and objectively.
11 atributes that successful manager needs are devided into three groups, and some of this skills are social
skills, emotional skills, self-knowledge.
Except of knowing himself, the master needs to know his team.
To do that hee needs to be familiar to some approach to people classification.
This classification can be araanged as this:
-thinker: enjojs solving problems with logic, he is rational and good at facts and figures
-sensor: is good at getting things done, works hard and ti is usually well organised
-intuitor: good at creative brainstorming
-feeler: warm and sympathetic
The traditional view of nanagement is a pyramid with employeers upwards and instructions flowing
downwardes.
Also, famous is Maslows hierarchy of needs which is devided into peoples needs and existence needs.
MAKING DECISIONS is important for good shipmaster.
One of greatest inhibitors to decision making is the fear of being wrong.
Generaally, there are 7 steps required to make an effective decision:
1. identifing the problem
2. defining the problem
3.specifing parameters
4. deciding the right course
5.adapting the decision
6.implementing the decision
7.checking the course amde good

PLANING means having a plan if things do not go according to plan.

SWOT is one well tried method of analysing in planing.
Streangths- which are to built
Weaknesses-which are to be cured
Opportunities-which are to be grasped
Threaths which are to be avoided
COMMUNICATION takes many different forms.
Golden rule of communication is not to get your message across but to ensure that the reciever
understand.
MEETING can be organised in various styles:
-formal meeting
-informal meeting
-brainstorming sessions
-briefing meetings
There are 5 types of participant that can be meet at the meeting:
-the unknowns
-the passionates
-the mums (who will stay silent all meeting)
-the talkers
BODY LANGUAGE
Knowledge of body language, especially in multi-cultural environmentaa, can guide us to other peoples
thoughts and feelings.
Total impact of messages is about:
-7% verbal
-38% volcal
-55% non verbalfor example, arms or legs crossed generally means a negative signal.
STCW is IMO Convention on Standards, Training and Watchkeeping-emphasises the acquisition of skills
and provides for functional approach of certification.

Chapter 3
BUDGETS AND MANAGEMENT INFORMATION SYSTEM
All seafarers must understand the fundemental principle of controling finanes and planning budgets.
The must be aware that withouth financial control ther is no safety and profitability.
Good planning skills are really important to success and once calculated, the budget shoud be followed.
For theis reason, seafarers must know how budgets are calculated and constructed, and understand
relationship between budget and management so that they can follow that budget and use management
techniqes by themselves.
FORMAT FOR A VESSEL BUDGET
The format is one example of how vessels income and costs can be organised into logical groupings and
used for creatinf budget.
Format consist of:
-FIELD 1 : trading days, gross and net trading income REPRESENT THE TRADING ACTIVITIES
-FIELD 2 : classification, drydocking, repair, maintence, crew costs:REPRESENT OPERATING COSTS
-FILED 3 : profit and loss, cash flow, loan REPRESENT THE COSTS OF OWNING VESSEL
BUDGET TEAM:
Budgeting is a team activity, and shipmaster should never plan alone, he needs to involve whole
management team.
Before dismissing his team to start calculating, he needs share with them the secret of good planning- the
five-minute budget.
Team also needs to make a budget presentations.
FINANCIAL ACCOUNTS do not normally form the part of the ship responsability, it is goot to have a
knowledge of cash management.
CAHS FLOW is simpliest concept and it is the lubricant which keeps the organisation operating.
The management of a voyage charter is one of prime areas where master can impact directly on the
financial viability of the vessel.
There are different voyage calculations.
For example, the one for dry cargo includes : type of cargo, amount of cargo, load and discharge ports,
freight rates, lay days and cancelling date.
Voyage calculation for liquid bulk is different, and it includes bunker prices, port costs, canal transit,
freight rates, revisions..

Chapter 4
TERMS OF TRADE AND BILLS OF LADING
The need to transport goods from producer to user is fundemental to international transaction that both,
buyer and seller, need to consider it at the outset of their considerations.
Some of the considerations which they need to have in mind are set out in following checklists.
When entering into an international trade contract involving an element of maritime transportation, both,
the buyer and tje seller, need to consider a range of factors: documentary and physical.
SHIPPERS CHECLIST below is based around the recommendations of some of the worlds major
container operators.
First factor is documentary which consist of contract of sale and receipt of documentary credit.
Physical part of shipper is shipment and id depends on diffrent factors, rof example, if shipment is FCL or
LCL, if goods reqoire special attention during carriage (for example if goods are refrigerated) ..
CONSIGNEES CHECKLIST also consist of documentary and physical factor.
Documentary consist of contract of sale and letter of credit, and physical factors are for example:
delivery.
In the Nautical briefing, incoterms of trade such FAC, FAS, FOB... were introduces for making easier for
buyer and seller to select the best alternative for their particular trade and to make it cooperation and
comunication much easier.
Their meanings are different and some of them means:
CFR- cost and freight
CIF- cost insurance and freight
DES- delivry ex ship
FOB free on board
FAC- free carrier
There are different methods of paying in trede bussiness, the easier is cash in advance, but requires a high
degree of trust and for that reason is rearely used.
Often, the documentary credit is issuing.
A BILL OF LADING is a document the transporter delivers to the consigner, through which the former
admits the receipt of goods.
If the bill of lading states that the goods are delivered to bearer , then the cargo can be calimed by a
peroson who presents an original document. This is known as an open bill of lading.
In most cases, the bill of lading states that the goods are delivered to a named consaigne. This make the
document negotialble, which means it can be endorsed to someone else if they buy cargo.
Marine or ocean bill of lading is also referes to as a port-to-port bill of lading, which describes it role
perfectly.
Tere is also charterpary bill of lading.
For multimodal transport there is combined transport bill of lading.

Chapter 5
LEGAL FRAMEWORK FOR CONTRACTS OF CARRIAGE
The basic of international trade are described in the Nautical Briefing on the developent of maritime
commercial practice under the heading international trade today.
The 6 essentials of every international trade transactions are idetified as:
-an agreed product of service
-a sale contract
-shipping and delivering details
-terms of payment
-documentation
-insurance cower
A general understanding of the terms and conditions of the sale contract gives a useful understanding of
the relationship between shipper, charterer and reciver.
The contract contains 30 clauses and they define quality, quantity, delivery, shipment and clasification,
insurance..
Any oceangoing vessel carring cargo is involved with large sums of money.
Even if there is no damage to the cargo, the master in signing bill of lading, has provided a document of
title to the full value of the cargo to a consaignee.
These relationships are governed by the framework of international conventions and national law.
There are 2 types of contract of carriage: charterparties and bill of lading.
Charterparties are typically used when a shipper wishes to make use of an entire vessel whilst bill of
lading are used where the shipper only wishes to book space on the vessel.
Charterparies cannot perform the crucial role of the bill of lading and for thi reason it is common for bill
of lading to exist together with charter parties and it is also common to find clauses in one or both relating
to the other.
The goal to achive uniformity it the application of law to the central document in most contract for the
carriage of goods by sea, was achivedin few legal alternative regims:
-hague rules
-hague-visby rules
-hamburg rules
-national law in countries which are signatories to none of the conventions
Now, the York-Antwerp rules from1994 are generaly applied and they consist of different rules from A to
F which, amon all, describes general average.
For example, rule D emphasies that the purpose of general average is to deal with the consequences, not
judge the causes.
Rule G defines the calculation of general average.
When a vessel sails on a normal voyage, she will be subject of at least two contract: charterparty between
charterer and owner, and the bill of lading between cargo owner and shipowner.
Since the cargo owner may change one or more times during the voyage there is room for conflict.
The INCORPORATION CLAUSES is designed to incorporate charterpary clauses into a bill of lading in
order to resolve this potential conflict.

Chapter 6
CHARTERPARTIES: THE MASTERS ROLE AS MANAGER
in this chapter the intension is to analyse three commonly used charterparties and buildu up logical format
for a set of voyage orders.
Althoug they are based on standards documents, charterparties are essentially negotiable contracts.
To manage them effectively, the master will need to:
-understand basic charterparties concepts and appreciate the meaning of various clauses
-be able to brief the vessels management team
-plan ahead
Dry bulk voyage charter defines charteret, shipper and freight.
Arrival is im clauses 1 and 9 as well as the estimated time of arrival.
Here are also NOR- notice of rediness and canceling date.
Copmplicated calculations of laytime and demurage are neccesary, and the areas to be addressed are:
-when laytime starts
-the calculation of laytime
-the calculation of demurage
Laytime may be calculated in one or two basic ways, either by starting a specific time or by starting a
loading rate against a given tonnage to load or discharge.
Master also must confident that his vessel is seaworthy.
The dangerous cargo is defined by IMDG code and there are 3 000 substances listed as hazardous to
human life and the environment.
A master should know what charterpary says about dangeorus goods and if the vessel has right
conditions for this types of cargo.
Also, there are some specifications about transfering live animals and deck cargo.
The voyage charter for liquid bulk is much different and it icludes its freight and lines, loaded
passage,speed, ETA, safe berth, seaworthiness...