Marine Agency: Nomination and Appointment

Marine Agency 

A maritime agency, often referred to as a shipping agency or maritime services provider, is a company or organization that provides various services to ships and shipowners. These services can include port agency services, ship management, crewing, logistics, and more.

Marine agencies can be nominated and one party becomes a nominating party and the other an appointing party. In this blog we are trying to explain about the difference in the two and who gives the appointment and/or nomination

What is Nomination?

"Nomination" refers to the process of selecting and appointing a specific agency to provide various services to a ship during its port call or maritime activities. When a ship is about to arrive at a port, the shipowner, operator, or charterer may "nominate" a maritime agency to act on their behalf and handle a range of tasks and services related to the ship's visit.

An agent nomination contains specific instructions for the port agent on how the port call/cargo should be handled e.g., contacts to be kept informed about operations, frequency of updates etc.

An Agent nomination should ideally be sent by email to the ship agent directly. If ISO certified, a standard nomination template & process should be available within the organization which can be used.

Nominating party and Appointing party 

Nominating Party: The nominating party is the entity that selects or nominates a specific maritime agency to handle services for a ship during its port call. This party could be the shipowner, operator, charterer, or another relevant party involved in the ship's operations. The nominating party chooses the agency that will act on its behalf to coordinate tasks such as port agency services, customs clearance, crew arrangements, logistics, and more.

Appointing Party: The appointing party is essentially the same as the nominating party. It refers to the entity that appoints or designates a specific maritime agency to represent its interests and manage the various tasks and services required for the ship's port visit. The appointing party entrusts the agency with ensuring that all necessary services are arranged and executed smoothly. 

Difference between Nominating and Appointing party 

Let's delve into the in-depth differences between the operations and processing carried out by the nominating party and the appointing party in the context of maritime agency and shipping

Nominating Party

 Responsibilities:

1. Selects a reputable agency.
2. Identifies port call requirements.
3. Directly communicates instructions.
4. Ensures efficient service execution.
5. Remains the primary represented entity.

Decision-Making and Authority:

1. Approves agency selection and key decisions.
2. Acts as the main contact point.

Monitoring and Oversight:

1. Ensures services meet requirements.
2. Provides feedback for improvement.
3. Collaborates with the agency for adjustments.

Appointing Party

 Role and Responsibilities:

1. Delegates authority to a maritime agency.
2. Selects the agency based on expertise and track record.
3. Grants legal representation during maritime activities.

Decision-Making and Authority:

1. Delegates specific tasks and defines the scope of services.
2. Retains oversight and approval over major decisions.
3. May formalize engagement through a contract.

Risk Management and Strategy:

1. Makes strategic decisions aligned with long-term goals.
2. Manages risks and ensures compliance.
3. Ensures agency tasks align with broader objectives.

Who is nominating and appointing party?

• Case 1

Cargo often begins its maritime journey under FOB terms.

The buyer then engages ship brokers to find the right vessel.

Ship brokers assess options and propose suitable choices.

Negotiations between the operator and buyer follow, leading to a Charter Party agreement.

This agreement governs the voyage, ensuring a seamless cargo journey.

 Here, 

Operator is Appointing Party:

 In the Charter Party agreement, the operator becomes the appointing party by selecting and appointing the vessel for the cargo's transportation, as agreed upon with the buyer. This role includes overseeing the vessel's readiness and ensuring compliance with contractual obligations.

Buyer is Nominating Party: 

In the same Charter Party agreement, the buyer becomes the nominating party by nominating or selecting the vessel proposed by the operator. The buyer's role involves confirming the choice of vessel and agreeing to the terms and conditions outlined in the Charter Party, ultimately facilitating the cargo's journey across the seas.

• Case 2

Cargo sold under CIF terms, covering goods, insurance, and freight.

Supplier employs a broker to find a suitable vessel as per CIF rules.

Broker appoints the vessel operator on the supplier's behalf.

Vessel operator negotiates shipping terms with the supplier.

Formal Charter Party executed upon agreement, confirming CIF shipment.

Here, 

Operator is Appointing Party: 

In a CIF agreement, the operator, appointed by the supplier via a broker, oversees cargo transport, ensuring compliance with CIF terms that include the cost of goods, insurance, and freight.

Buyer is Nominating Party:

 In CIF terms, the buyer takes on the role of the nominating party, initiating the agreement by purchasing cargo that includes expenses like goods, insurance, and freight. Subsequently, the supplier engages a broker to find a vessel for cargo transport, with the buyer nominating the vessel operator and engaging in operator-related negotiations.

• Case 3 

Cargo purchased by trader under FOB terms, indicating responsibility at shipment.

Trader sells cargo to buyers under CIF terms, involving maritime logistics.

Trader appoints a broker to find a suitable vessel.

Broker appoints a vessel operator for cargo management.

Operator negotiates shipping terms with the trader.

Charter Party execution confirms CIF shipment under agreed terms.

Here,

Operator is Appointing Party:

 In CIF agreements, the operator becomes the appointing party. The trader initially buys cargo under FOB terms, indicating responsibility at shipment. Subsequently, they appoint a broker, who designates the operator for cargo management.

Trader is Nominating Party: 

In CIF agreements, the trader serves as the nominating party. They start by purchasing cargo under FOB terms, signifying responsibility at shipment. The trader then appoints a broker, who nominates the vessel operator, with shipping term negotiations establishing the trader as the nominating party.

Conclusion 

In summary, a maritime agency provides essential services for ships and shipowners, and "nomination" involves selecting an agency for port call tasks. The "nominating party" chooses the agency, while the "appointing party" designates the agency. In different scenarios, such as CIF agreements, the operator becomes the appointing party, and the trader serves as the nominating party. Their roles and responsibilities vary based on the maritime terms, with the operator overseeing cargo transport and the trader facilitating negotiations and cargo logistics. Effective collaboration between these parties is crucial for seamless maritime operations and cargo transport.