November 4, 2009
New maritime debt collection service
A new company, SeaDebt Management, has been established in London to provide debt collection services on a global basis. Backed by a group of City investors, SeaDebt is managed by a team of specialists under the direction of Paul Johnston, who was formerly with the International Transport Intermediaries Club (ITIC).
"In a global business such as shipping, securing payment for goods or services can often be difficult," says Johnson, "especially when the debtor has little in the way of assets or can't be pursued cost-effectively through normal litigation. In today's economic environment, when so many companies are struggling to stay in business, the problems associated with non-payment of debt inevitably increase."
In the first few weeks of operation, through personal contacts and a growing network of P&I club correspondents and lawyers around the world, SeaDebt has received inquiries from companies as far afield as India, Brazil and Turkey. It is already collecting debts for companies working in sectors that include bunker supply and tank container operations.
According to Johnston, the case of the tank container operator highlights the problems many people have in securing payment.
"This client hired out a tank container to a freight forwarder that has little in the way of assets. This is of course is quite typical. Many forwarders operate out of rented offices with just a handful of staff yet can be handling substantial sums of money.
"Even if the tank container can be recovered, the associated expenses may be high especially if there is a need for repositioning, cleaning and repair before it can be used again.
"In this particular case, we are optimistic about being able to recover the hire costs and of obtaining a contribution towards expenses."
Two other cases involve South American ship suppliers who are chasing owners for non-payment. Another involves an Indian bunker trader, which is owed around $142,000 for bunkers ordered by a charterer. In such instances, SeaDebt will sometimes seek to arrest vessels if the charterers/owners continue to ignore requests for payment.
The supply of bunkers is a particularly risky business and one that is likely to be a source of much new business, says Johnston:
"Many shipowners are experiencing major cashflow problems at the moment and as has been widely reported, some very well-known names are amongst them. It is hardly surprising that some bunker suppliers are demanding pre-payment before delivery. However, in a competitive business, this is not an option that is available to all and inevitably some bills will go unpaid until the owners concerned are faced with the reality of a ship arrest or whatever else it takes to secure payment."