Yacht management explained
A yacht is so much more than a rather expensive floating asset. The shiny investment comes with a whole lot of responsibility. Superyachts are essentially businesses, becoming increasingly elaborate and time-consuming, demanding a diverse team with varying skills and experiences.
Modern yachting requirements, paired with the complexities associated with global operations can be overwhelming. Evolving captains have realized that they are not the only one with the perspective to meet the owner’s needs. Why go at it alone? Outsourced yacht management provides access to a wider set of expertise than is possible to have in a crew. With various approaches to yacht management, the consistent key to success remains unwavering focus towards the clients’ best interests.
What is a yacht management company?
Envision a triangle; the three points representing the yacht owner, the yacht management company and the yacht captain/crew. Always functioning at the top, the yacht owner will determine the hierarchical dynamic between the shore-based management company and crew. A yacht management company can be a valuable partnership between the vessel, the owner, and the captain. Providing a fresh outside perspective, the management company should enhance efficiency and improve the overall guest experience. The team of experienced professionals offer support, by providing complementary knowledge, advice, resources and solutions. Not only reducing stress, a yacht management company also mitigates both financial and legal risk. Depending on the vessel’s requirements, most companies will tailor their services to management needs. Typically, the shore-based mechanism supports yacht operations with respect to accounts, technical interventions and compliance with legislative requirements.
What is yacht self-management?
Simply put, self-management is the scenario whereby the captain works directly with the owner and/or their team for all aspects of the yacht’s operation. Self-managed yachts will vary depending on the amount of detail the owner requires and how particular the captain is. Back in the day, this was the original form of yacht operations. However, with tonnage and regulatory intricacy increasing, there is a point where this model reaches a limit. Not to say it isn’t possible, however, strong caution must be exercised with this management method. Realistically, this approach is probably only an option for small or very mature operations. If engaged, a recommended external operations/management audit (above normal compliance) should be undertaken annually.
Why the need for a yacht management company?
The ownership and operation of a yacht gives rise to a number of legal, fiscal, financial, technical issues and contractual relationships. All of which require careful planning and consideration. A luxury yacht is an increasingly complex business that could land you in hot water should important responsibilities be overlooked. Not a legal requirement, but a yacht management company will take care of the headaches that come with owning a luxury yacht. Some of the hassles include safety, crew, maintenance, insurance, audits, class, flag regulation, compliance and… the list is never ending when it comes to maintaining and running a superyacht. That’s why a management solution is worth considering, taking care of the million and one tasks occurring behind the scenes on a daily basis.
What is a Flag and how do yachts decide on a Flag?
This is probably one of the most important decisions a yacht owner will have to make. Not simply a matter of patriotism or aesthetics, the flag state will dictate the law of the land, or sea in this matter. Defined, the flag state is the country or governmental entity under whose laws a vessel is registered or licensed. The chosen flag will directly impact the vessel’s privacy, taxes, exposure to liability, boarding, and overall commercial success.
The owner could choose country of residence, however the more popular choice in the superyacht world tends to be an offshore flagging. The offshore ship registry involves selecting a country whose laws are attuned to the complexities of ownership and charter operations. A good starting point is determining Good vs Bad Flags. Good flags will be on the White List maintained by the Paris Memorandum of Understanding on Port State Control (Paris MoU). Flags on this list excel in the areas of safety, security and environmental protection. As a result, they aren’t on the radar which means fewer inspections from the port officers. The Paris MoU also maintains Grey and Black Lists, where the risk of ship boarding and detentions is higher.
Not to be taken lightly, choosing a flag is a matter best undertaken under counsel of a maritime attorney. Sailing under a particular flag can be a complex decision that involves sound knowledge of international maritime law. The flag state is authorized to enforce regulations related to periodic inspection, certification, and pollution prevention. It will also determine the number of days per year that the vessel needs to berth in its place of residence.
What is Gross Tonnage?
Tonnage is an important topic in the maritime and yachting industry. Significant, because it forms the basis for numerous items, including safety regulations, manning scales, registration fees and port dues.
Initially used in reference to weight, nowadays it is a measure of the volume/size or cargo capacity of a vessel. An International Tonnage Certificate (ITC), issued by the flag administration, is necessary for vessel’s greater than 24m on international voyages. The certificate exhibits tonnage, length, breadth, and depth. For vessels below 24 meters, it is at the discretion of the flag administration whether to issue a comparable certificate or document, such as a Certificate of Tonnage or National Tonnage Certificate.
What services do yacht management companies provide?
Every owner is different and has different requirements, so the management company often offers bespoke services. Typically, yacht management duties may include:
- Liaising: This ranges from shipyards to designers and brokers.
- Updating documents: The company ensures legal, regulatory, technical, and financial aspects are current. In the long run, this can save valuable time and unnecessary expense.
- Yacht registration: Often, the superyacht management company advises on the implications that location has on the yacht’s commercial success and finances.
- Accountancy: This includes budgeting and reporting. A superyacht management company can provide a dedicated financial professional who understands the nuances of yachting.
- Assisting with finding and employing crew: This lets your captain focus on his or her priority: the safe and smooth operation of the superyacht.
- Identifying and securing berths.
- Ensuring safety compliance: Certainty it meets international standards.
- Planning and managing maintenance schedules: This includes full refits.
- Assisting with insurance: For the yacht and crew.
- Advising and/or managing charter operations.
What is a mini-ISM?
Nothing mini about this concept, the remarkable plan could mean the world of difference. Both a requirement of the MCA and Marshall Islands commercial yacht codes of practice, a mini-ISM aids to prevent disasters and impending lawsuits. Applicable to all yachts over 300 tons, the Safety Management System (SMS) should be relative to the vessel’s requirements. Many smaller yachts will also be liable in accordance to their flag.
A Mini-ISM consists of a simple plan to:
- Check and maintain all the safety and critical equipment on board.
- Train the crew for the more likely emergencies that yachts can have.
- Familiarize new crew on safety awareness and duties as soon as they join.
- Have checklists for hazardous events, such as bunkering and leaving harbor.
- Encourage safety awareness.
- Ensure that those who drive tenders, watercraft, or are charged with bridge watchkeeping really are qualified and know the idiosyncrasies of the equipment they are operating.
- Document what you do and plan to do, ensuring bases are covered ahead of an investigation.
What is a yacht/fleet manager?
A yacht/fleet manager is the primary point of contact for yacht owners to report the essentials. They are in charge of significant decisions and the overall functioning of the yacht. The following attributes and skills are vital for a yacht/fleet manage,
- Team player
- Good leader
- Excellent communication skills
- Solid experience in the field, ideally either a chief engineer, chief officer or a master mariner.
- Acquainted with ISM, ISPS, Port State Control and SOLAS codes that cover safety measures and rules and regulations regarding marine vessels.
- Well versed with the flag state laws and regulations.
Do fleets operate virtually?
2020 fast-tracked the shift from local to remote quicker than anyone would have anticipated. With the technological advancements available today, working remotely is not only easy, but also considered the “new normal” and with it comes endless opportunity. This is no different in the yachting industry. Over the last 10 years, yachting has come a long way, with an obvious shift towards a digital way of operating. Working on-board yachts, crew are now accustomed to virtual communications and technology bridging the gap between the vessel and shore-based parties.
Yachts have been operating virtually for quite some time, communicating through email, whatsapp and VSAT whilst cruising. Uniformity is key when it comes to fleet management. Secure programs like Dropbox and Google Drive ensure operations are safely speaking the same language. A virtual knowledge base also assists with accessibility and is great for sharing latest guest preferences, changes in SOP’s etc.
The pros and cons of working with a fleet?
Fleet yacht management embraces an integrated approach, combining a plethora of resources, which could boost revenue and productivity. Some of the pros and cons include,
- Resources: Replenishment of stock/supplies from nearby fleet.
- Recruitment: Interchanging of crew, should a replacement be necessary, avoiding the lengthy recruitment process.
- Support: The larger team means access to the expertise of other captains and senior crew members.
- Emergencies: Nearby fleet could assist in the event of an emergency.
- Conflict: Different leadership and management styles may lead to conflict among captains and senior crew.
- Decisions: Multiple personal preferences could result in delays.
- Logistics: If fleet are not in close proximity.
- Disgruntled crew: Insight to other work environments could result in job role comparison.
- Loss of information: With so much communication occurring, some information tends to get a bit lost.
How can Virtual Pursers assist with yacht management?
Not a yacht management company; Virtual Pursers are an extension of your crew and act as a landbased bridge to your shoreside counterparts. The administrative pressures faced by yacht owners, captains, management companies, and even full-time Pursers, can be difficult to keep on top of. Virtual Pursers “get yachting” and understand that time is a precious commodity.
Fulfilling the role of a Purser, just virtually, the team perform a wide range of services, including; vessel and crew administration, accounting, logistics, provisioning, itinerary planning and guest concierge. With over twenty years combined experience, working for an impressive array of yachts all over the globe, the team of industry experts provide a specialized service built on the foundation of practical knowledge. To name drop, the team have worked with fleets such as M/Y Anastasia, M/Y Nirvana, M/Y Barbara, M/Y October, M/Y Tatoosh, M/Y Meduse, M/y Hampshire II. Offering remote assistance to superyachts just as ‘virtual’ becomes the standard, Virtual Pursers provide a bespoke shoreside solution with the mission to save time and alleviate stress.
With access to a skilled Purser, the benefits are far reaching and can also extend to establishing uniform operations for fleets, better preparing brokers for charter, or lending a helping hand to shipyards/marinas. No matter the size of the yacht or the extent of the need, as trusted yachting professionals, Virtual Pursers are readily available to support all vessels. Taking up no space on-board, a dedicated Purser without the overheads, Virtual Pursers are proud to offer the most cost-effective Purser solution on the market. This flexible approach is ideal for yachts that are fully crewed, have minimal space on-board, or who don’t necessarily require full-time support. Visit virtualpursers.com for more.