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Ship Broker's Role in Food Aid Programs

Learn about the important role of a ship broker in government food aid programs and how they handle market analysis, contract administration, freight bids, and logistical support. Discover how ship brokers problem-solve challenges such as delayed cargo arrival, cargo infestation, and cargo claims at load ports.

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Ship Broker's Role in Food Aid Programs

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  1. 2010 International Food Aid & Development ConferenceAugust 2-4, 2010Kansas City, MissouriSponsored by the USDA and USAID • Vessel Loading Observation Break-Out Session • Presentation • by • H. Keith Powell

  2. Potomac Maritime LLC • - Ship Broker with offices in Washington DC and Houston, Texas • - Represents US flag and Non US Flag Ship Owners participating in the US • Government food AID Programs • - Major Clients: Maersk Line, Maersk Line Limited and Sealift, Inc

  3. What does a Ship Broker Do? • > Market Analysis • > Contract Administration • > Prepare and Submit Freight Bids • > Keep various parties informed of Vessel positions • > Collect Freight Monies due to Carriers • > Logistical Support • > Problem Solve

  4. Other Ship Brokers Participating in the Program: Phoenix Chartering Euro America International Navigation Next Wave Potomac Shipping

  5. Potomac Maritime Broker at Work!

  6. Other Ship Brokers at Work!

  7. Delayed Cargo Arrival / Off Grade Cargo: Action Required: > Swap Out Cargo Between Vessels or Programs > Expedite Deliveries > Flexibility from Cooperating Sponsors > Quick Decisions from Decision Makers Problem Solving: Load Port Challenges

  8. Infestation of Cargo at Load Port: -Current Contract Terms Place Burden on Carrier - Infestation Either Latent and in Cargo at Time of Delivery to Port or -Cargo Becomes Infested While in the Load Port Warehouse - Carrier is Responsible for Fumigating Cargo in Warehouse, on Board Vessel or in Containers Problem Solving: Load Port Challenges

  9. Infestation of Cargo at Load Port: New Approach:US Government pays for any fumigation required at load port (in warehouse or on board vessel or in container) Rational: > Cheaper... ? Perhaps. USG already paying cost to Carriers > USG can possibly negotiate better fumigation cost than individual Carriers > More Proactive Approach to Issue > Focus is on Delivering Cargo Free of Infestation > Commercially Shipper Responsible for Fumigation of Cargo Problem Solving: Load Port Challenges

  10. Public Enemy Number 1

  11. Rodent Infestation of Cargo at Load Port: -Clear Understanding of Various Parties Responsibilities: Port Authority Stevedores Suppliers Ocean Carrier Shipper US Government - Contractually Cargo is in the care and custody of the Ocean Carrier - Physically cargo in the Possession of the Stevedores - Ocean Carrier does not have direct control of the Cargo - must work through Stevedores as it’s subcontractor Problem Solving: Load Port Challenges

  12. Rodent Infestation of Cargo at Load Port: Ocean Carrier’s Main Concerns: -Important that only clean cargo being loaded on vessel - If a higher level inspection procedure is to be used - establish well in advance of vessel loading - Any delay in handling the cargo and loading the vessel is minimized or eliminated altogether Problem Solving: Load Port Challenges

  13. Rodent Infestation of Cargo at Load Port: Suggestions: >USDA to establish standards for cleanliness and rodent remediation procedures for all terminals handling US Government Food Aid > USDA to conduct regular terminal inspections to ensure compliance > If there is a higher level of inspection required prior to loading – clearly spell out the procedure / protocol in the freight tender > This should help avoid problems developing at time of vessel loading which can result in expensive equipment and vessel delays Problem Solving: Load Port Challenges

  14. Cargo Claims at Load Port: Current Contract Terms holds Ocean Carrier responsible for cargo damage that occurs at the load port with zero tolerance for loss Result: > Carriers must increase their rates to cover potential for cargo claims yet they have no direct physical control over cargo Cargo is in the possession of the stevedore / terminal operator who is subcontractor to cargo Suppliers for rail car unloading and Ocean Carrier for loading vessel or stuffing containers Problem Solving: Load Port Challenges

  15. Cargo Claims at Load Port: Suggestion: Make Terminal Operator directly responsible for any load port damage Rational: > Direct accountability > No free lunch – Freight rates currently include provisions for potential claims and if suggestion adopted stevedores rates will include provision for potential claims > BUT ... Holding the party responsible that is in direct control of the cargo, should promote more effective methods for minimizing cargo damage and loss > For Stevedores – Minimizing cargo claims can become a competitive advantage versus just a cost of doing business Problem Solving: Load Port Challenges

  16. Potomac Maritime LLC • Thank you for listening and enjoy the Conference

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