“Training too often seen as a ‘soft’ cost.’ The lastest article from Jeffrey Blum highlights the importance of training. Offshore training in particular is something we focus on here at the NMCI.
“The struggling dry bulk sector suffers from a basic lack of professional expertise that can generate serious problems. The cause and solution are straightforward, argues Jeffrey Blum.
Perhaps the most striking difference between the dry bulk sector today and a decade ago is the increasing dominance of the market by large companies.
In itself, this is not a problem but the industry has been navigating tough times for a number of years and, as a result, training is often high on the list of immediate cost cutting opportunities. This is short sighted.
The size of a company does not necessarily dictate a level of professionalism, expertise or commitment to quality training within it. Because of their size and scale, too many believe they can rely upon internal expertise to train others – an approach that is more often than not ineffective.To avoid the mistakes of one generation being passed down to the next, these organisations need more thorough and standardised training than current internal processes provide. The sector is already struggling with self professed experts disseminating their ‘knowledge’ and, by doing so, simply extending their own operational ineffeciencies.
The proof of these problems lands on arbitrators’ desks every day. Of the disputes I come across, too many stem from a basic lack of knowledge and understanding.
Commonly these disputes are about demurrage calculations, but the subject of the dispute is secondary to its underlying cause: a lack of training in how to carry out these processes appropriately.
Employees need to be aware that the dry bulk market has faced significant challenges in the past few years, with contentious changes to the rules which
govern trade. Several astute companies continue to use INCOTERMS 2000 and have chosen to ignore the updated INCOTERMS 2010 introduced on ‘ January this year. This is because the changes and alleged simplifications made to the rules are not yet recognised as being of benefit to the industry and are likely to increase confusion.
Another significant example is the change made to the UCP 500 Rules in the new version (UCP 600, from 1 July 2007, which allows a charterer to sign bills of lading for a phantom cargo on a phantom ship and then simply collect huge amounts of money from unsuspecting banks. It is therefore essential to be fully aware of the consequences of which ever terms are referenced in contracts and how to apply them.The dry bulk sector is sorely lacking the level of professionalism and knowledge it needs to confront an increasingly challenging market environment.
Organisations within this market ought to urgently evaluate the knowledge base of employees and compare that with the number of disputes with which they are involved.
By enrolling key staff on to quality training courses their skills will be updated and knowledge of best practice operations refreshed. Training may too often be seen as a ‘soft’ cost but it is one area in which modest investment can offer significant and far reaching returns.
About the Author:
Jeffrey Blum leads the Dry Cargo Operations and Chartering course for GAC Training and Service Solutions (GTSS). He is a Fellow of the Institute of Chartered Shipbrokers, a past chairman and the current education officer of its London Branch, a fellow of the Chartered Institute of Arbitrators and a Visiting Professor at the World Maritime University.”
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