FONASBA, the international Federation of National Associations of Ship Brokers and Agents, has just turned 50. General Manager Jonathan C. Williams talks to HANSA about past and future challenges for the organisation’s members
Which topics have mainly affected the association’s work over the past 50 years?
Jonathan C. Williams: Looking back[ds_preview] over the past 50 years of FONASBA it was interesting, but perhaps not surprising, to find that many of the issues FONASBA was established to address in 1969 are still with us today, for example the lack of appreciation of the vital role the ship agent plays as the coordinator of the ship port interface and the wider supply chain, the continued downward pressure on agency fees and the fact that in many jurisdictions, ship agents are not recognised in maritime law. Whilst the ship and master are ultimately responsible for getting the ship in and out of the port, the agent actually carries out many of the formalities at local level. One of our major achievements in recent years was to get a definition of the ship agent included in the revised IMO FAL Convention. This acknowledged both the role and responsibilities of the agent in the port call and also clarified the relationship between the ship owner and the ship agent. Doing so gave a major boost to our efforts to enhance recognition of the ship agency profession.
For brokers, the biggest change has been in the composition of the sector. Fifty years ago, there was a relatively even spread of small, specialist broking firms working in niche markets, medium size companies covering a number of sectors and the large, international companies offering a wide range of services across many markets. Today, the middle ground has been hollowed out as the medium size companies have come together to compete with the global players or been taken over by their bigger rivals. The small niche brokers are still managing to maintain their specialist market coverage however.
As a result of our efforts over the past 50 years, the contribution made by ship agents and ship brokers to maritime transport is much better known by legislators, regulators and the wider maritime sector. The coverage and spread of our membership has increased significantly in that time, especially in less traditional maritime markets, and we now have 67 members in 63 countries. FONASBA is also active in all relevant fora, including IMO and the European Commission, so we are able to influence maritime policy at the highest levels. We also work closely with other maritime sector organisations, both international and European, on matters of common interest and so increase the effectiveness of our actions.
How did business change in the recent years as more players from the financing side step in as owners or managers?
Williams: Operationally, who runs the ship is not important to the broker or agent. The ship still needs a cargo and to get into port to load and unload it. The ship broker is responsible for bringing the ship and cargo together and the ship agent for getting it into and out of the port quickly and efficiently. The name of the owner or operator is therefore just a line in a charterparty or an agency agreement. From a market intelligence perspective, the ship broker needs to be aware of who is operating in the market and what ships and cargoes they have but generally speaking whether the operator is a bank, a single shipowner or a pool does not affect the way the broker or agent approaches their work. There are still a number of ships and cargoes out there and it is their role to keep the ships full of cargo and moving through the ports.
What were the milestones in your almost 20 years as FONASBA’s general manager?
Williams: Probably the biggest one would be the introduction of the FONASBA Quality Standard (FQS). It is the only quality programme for ship brokers and ship agents and was launched in 2007. One of the main problems we face is that in most countries anybody can become a ship agent. Ship agency services can be delivered from the boot of a car with just a laptop and a mobile phone. No licensing, certificates or other qualifications are required. Companies that are well established and have invested in staff, training and resources in order to provide a first class service are therefore facing competition from people who don’t carry the same overheads. With agency fees continually being driven down, the established companies are being squeezed by ship operators who demand a high level of service provision, but at the lowest possible price.
The FQS was designed to recognize those companies and highlight their commitment to high-quality service provision. The application and audit process is relevant, appropriate, rigorous and robust but less involved than gaining ISO 9001 certification so can be achieved by small agencies as well as by larger companies. Once approved, those companies can demonstrate they are capable of providing the levels of service their principals demand. The Standard, which is supported by BIMCO, Intercargo and Intertanko, is now in place in over 500 companies in 38 countries. The approved companies are listed on the FONASBA website. The new FONASBA/BIMCO agency agreements also make provision for FQS-approved companies to indicate their status.
Have trends like digitisation impacted the necessity of networks and personal contacts in your sector?
Williams: Our members will certainly make good use of the opportunities digitalisation provides, as we did cables, telex and fax in the past. They are however only communication and data exchange tools. Shipping is a people business and its success relies, in significant part, on the close and effective personal relationships that exist between brokers and between ship agents and the port communities where they operate.
For brokers, knowing their counterparty ensures the negotiation is undertaken confidentially, professionally and fully in keeping with our motto: »Our Word, Our Bond«. With many fixtures concluded before the paperwork catches up, trust in the counterparty is vital in giving confidence that the agreed terms will be applied correctly. Unfortunately, the disappearance of trading floors, such as the Baltic Exchange, has limited opportunities to develop those personal contacts and so social gatherings within the community have taken on an added importance. For ship agents, the nature of the port call often requires last-minute changes to plans and the ability to call up a trusted and long-standing colleague in order to achieve a workable and effective solution at short notice is vital.
The tendency towards communicating exclusively by electronic means, especially amongst young members of the profession, is threatening the personal contact that is central to our way of conducting business. It is therefore important that the current generation of ship brokers and ship agents counter this tendency by actively and enthusiastically promoting the benefits of personal contact.
What lies ahead for FONASBA?
Williams: In the shipping industry, change is constant and whatever the future holds, ship brokers and ship agents will face and accommodate those changes as we have done for in the past. As mentioned previously, we will adopt and utilise future technological developments, including where relevant blockchain, AI and IOT, but in the end, the job of the broker is to bring a ship and cargo together and that of the agent is to handle the vessel in port and, importantly, attend to the needs of the most vital component, the crew.
No matter how the industry develops into the future, so long as there are ships to fill, cargoes to move and port calls and crew matters to attend, ship brokers and ship agents will be required. We have been providing those services for as long as there have been ships moving cargoes and we aim to remain a vital part of the international maritime supply chain long into the future. That said, progress does bring problems and challenges, as well as opportunities, and FONASBA will continue to discharge its obligation to promote and protect the professions of ship broker and ship agent and ensure their importance to the industry remains valued and appreciated.
Interview: Felix Selzer
