For the uninitiated, a shipping agency or agent is a designated organisation or person whose responsibility is to handle cargo and other shipments; protecting general interests of customers at ports and harbours; on behalf of ship owners and operators. Some tasks done by a shipping agency include ensuring the berthing of incoming ships, collecting freights and cargo, arrangement of storage bunkers and providing the necessary clearance documents for the operations.
However, the theme of this article is errors and when are shipping agents to blame for a hitch within a cargo-handling operation therefore possible mistakes from the agents’ side would be outlined and related to real-life errors. According to ITIC (International Transport Intermediaries Club) states that errors of ship agents are resulting in significant financial losses. What does this mean? Even the most minor miscalculation results in massive financial losses; examples of this are presented by marineinsight.com and analysed below.
The first example of this was the submission of vessel documents to a Middle Eastern port; describing cargo and tender of readiness for the port; documents were translated into English and Arabic as required. However, as normal as this act appears the problem had risen when the vessel arrived and the only berth it could discharge at would only become available in 10 days time; wasting time, fuel and other resources.
The mistake at first seems trivial as translation itself warrants possible inaccuracies since context as well as translation of the words themselves will surely vary when translated. However, due to this the misundestandings occur when action approaches. Here, claims are made against ship agents due to their lack of attention to the process of translation or any kind of document handling.
Another issue related to documentation and calculations/planning is miscalculation of cargo rates and categories. A mistake within this factor will bring damage related to differences between costs of cargo where differences in rate would be calculated against value of negotiated cargo and cargo delivered.
So what else should be know about such operations? Most importers of cargo employ forwarders/import agents who declare goods to Customs on their behalf to also calculate taxes (if any) due. While VAT (Value-Added Tax) or other taxation payments are recoverable other charges are not therefore even the slightest mistake does significant damage to the bottom line. Customs may also raise assessments for underpaid imports.
The mistake above was miscalculation of value and category of cargo which affected the bottomline; therefore, to get this right it is important to adjust costs to include royalty, license fees and materials supplied by the manufacturer. Value will not be accepted as open-market value of the importer is related to the seller.
The main lesson to derive from this is to pay closer attention to all the procedures, as mistakes are very common in aspects that are done constantly, Repetition and lack of changes to channels and procedures to assignments is the main culprit since repetition will incentivise staff to cut corners and therefore skip on some procedures without regards to consequences since every procedure is important within cargo, shipping operations; especially translation of documents.
The first step which can improve this and potentially fix the issue in long term is to work in groups, especially on processing of documents where faults can be detected by the 2nd member of those working on the project. However, human error not only happens due to lack of attention but also happens due to external pressure from management and deadlines. Deadlines become deadly when poor time management is involved therefore employees should efficiently approach the task.
There are many approaches to time management against approaching deadlines; however most differ in efficiency as people work differently in terms of thought processes and personal motivations. Unfortunately, fear is sometimes the best and only motivation to truly produce a successful project therefore the best strategy would be to keep the consequences in mind while doing the task as negative factors hit harder than and inspire better quality. Fear produces better products which also saves repetition of the same project for the same purpose; creating a fair reward.
