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Yacht management explained

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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
  • Multi-tasker
  • 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,

Benefits

  • 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.

Disadvantages

  • 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.

The Maritime Labour Convention (MLC). What? Why? How?

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The Maritime Labour Convention (MLC).
What? Why? How?

Ashore, there are labour standards to protect employees. But what if you are working at sea? That is where the Maritime Labour Convention (MLC) comes in. Shipping is a global industry, which explains the need for universal standards. What’s more, it is important that these standards are easy to understand, readily updateable and uniformly enforced.

What is Maritime Labour Convention?

The Maritime Labour Convention (MLC) is the “fourth pillar” of the IMO’s international regulatory regime for quality shipping. This international agreement of the International Labour Organisation (ILO), sets out seafarers’ rights in accordance to decent conditions of work. Commonly referred to as the ‘Seafarers’ Bill of Rights’, the convention was adopted by government, employer and workers representatives at an ILO Conference in 2006.

The MLC covers all possible working and living conditions on-board including

• Minimum age

• Seafarers’ employment agreements

• Hours of work or rest

• Payment of wages

• Paid annual leave

• Repatriation at the end of contract

• On-board medical care

• The use of licensed private recruitment and placement services

• Accommodation, food and catering

• Health and safety protection and accident prevention and

• Seafarers’ complaint handling

Why is the Maritime Labour Convention so important?

Firstly, because it brings together international minimum standards in one central place. This assists with ensuring comprehensive worldwide protection for an estimated 1.5 million seafarers. Seafarers are essential to international trade and tourism. Under the MLC 2006 every seafarer has the right to:

• A safe and secure workplace that complies with safety standards

• Fair terms of employment

• Decent working and living conditions on-board a ship

• Health protection, medical care, welfare measures and other forms of social protection

Second, because it helps level the playing field. This allows fair competition for member states and shipowners operating under the flag of countries that have ratified. The goal is to ensure that adequate working conditions go hand in hand with fair competition.

Enforcing the Maritime Labour Convention

In 2013 the MLC became binding law for 30 countries. As of January 2019, a total of 90 countries ratified the MLC 2006. This means that 91% of the world’s shipping fleet is regulated.

On ratification, the state has 12 months to enforce and adhere to convention requirements. The flag state has the authority and responsibility to implement the global standards. Commercially operated ships, 500gt or over, covered by the MLC require a certificate of compliance from their flag state. The two specific documents required are the Maritime Labour Certificate (MLC) and the Declaration of Maritime Labour Compliance (DMLC). When ships enter the port of an MLC country, Port State Authorities will carry out an inspection for possible violations. Inspections are an important aspect of the convention and also apply to ships that don’t fly the flag of an MLC member state.

“Ben Bailey, director of advocacy and regional engagement at The Mission to Seafarers reckons that the MLC has brought huge benefits to seafarers around the world. However, the fact that it is not in force everywhere means that too many crews are falling through the gap, particularly when they find themselves abandoned. A significant change to the convention would be for the international community to work to enforce the convention and to put pressure on those states which have not signed up to the MLC to do so”.

Facing MLC 2006 survey for the first time?

Here are a few important points to consider before requesting a surveyor onboard for inspection.

  • Ensure the DMLC-part-1 and DMLC-part-2, signed by the company’s DPA or manager, are always present and accessible on-board.
  • Seafarers should have the right to lodge a complaint directly with the master and also with appropriate external authorities when necessary. Ensure crew are provided with the on-board complaint procedure.
  • Ensure a signed copy of seafarer employment certificate is provided to all seafarers. Seafarer employment agreement (SEA), SEA should be in accordance with MLC 2006.
  • Collective Bargain Agreement must be available on-board. This document details all the terms and conditions of the crew employed on the ship.
  • Rest hour records, on-board work and watch-keeping schedules, must be up to date and on display.
  • Wage bill records and wage slips should be readily available with all crew in time of inspection.
  • Every vessel should have a mess committee on-board, conducting and recording regular meetings for crew suggestions and improvement of food prepared. Records must be available for the inspection of surveyor.
  • The inspector often checks the qualification certificates of the cook and catering staff. Ensure certificates of qualification and training of cooks is ready.
  • All crew members working on-board should be qualified and have all official documents as per STCW, flag state endorsements and equivalents. The minimum age limit for a person to work on board as per MLC-2006 is sixteen years. Ensure all the certificates are available along with the originals for inspection if asked.
  • Every seafarer has to submit medical certificate to the master. Medical certificates of crew on-board should be valid and meet the international standards required by ILO/ WHO guidelines. Ensure that the certificate is not expiring during the period of voyage.
  • Master must make sure the vessel adheres to safe manning requirements as issued by the flag state. A copy of safe manning certificate must be available.
  • A copy of Recruitment and Placement Service Certificate must be available and the manning agency should follow the guidelines of MLC-2006 and national labour laws for recruitment. In case of ownership employment a licensed manning agency is not necessary, provided that owner recruits as per MLC – 2006 and national labour laws recommendations.
  • Crew interviews will take place and cover working condition, food, treatment, facilities on-board and wages. Apart from this, questions may also probe crew’s knowledge on anything related and applicable.
  • The auditor will inspect housekeeping and hygiene, galley, mess room, dry and perishable provision stores, reefers, cabins and common toilets. These places should be neat, tidy and hygienic.
  • All-important certificates must be available for Inspection. Also make sure the IMO publications and other required documents are present on-board at the time of survey.

Maritime Labour Convention changes on the horizon

The MLC is considered a major milestone for global shipping environment in realising the rights of seafarers. However, there have been increasing calls for amendments to the convention in order to keep it up to date and relevant. The stresses associated with COVID-19 as well as technology advancements are just some of the factors that need to be addressed. The MLC is due to be amended in April 2021. All suggestions from signatories to the bill were submitted to the Geneva headquarters of the International Labour Organization (ILO) by 1 October 2020. Keep an eye on our info-hub for updates.

Virtual Pursers are not a yacht management company; we are an extension of your crew and act as a landbased bridge to your shoreside counterparts. As trusted yachting professionals with 20 years combined industry experience, we are here to help as well as to keep you informed on relevant industry related news and updates! For more information contact [email protected] or call +44 203 514 0413.