Not on the money

Greg O’Connell from ShipMoney says shipping needs to enter the 21^st century when it comes to crew payments.

Conservative estimates place some $1bn in cash on ships across the global maritime fleet.

Cash generally serves two purposes onboard. It is used for crew payroll advances along with purchases by captains for ship supplies and other miscellaneous items. The direct cost to ship owners/managers is estimated at some $29m annually to deliver cash to fleet. And this does not include the opportunity cost of capital by maintaining idle cash onboard: dead weight on a balance sheet in a business with razor thin margins.

I term currency sent home by seafarers as ‘affectionate dollars’ or monies sent home by seafarers to family or friends.

In a world where electronic salary payments are largely commonplace, the maritime industry remains significantly behind the curve and still to this day places vast sums of cash aboard. This is time-consuming in terms of reconciliation both in the office and with the master but it also adds further security concerns for crew travelling home with cash. There are reports that customs personnel in some airports confiscate cash from seafarers without returning the money. And of course there is the inherent risk of carrying large quantities of cash, especially by seafarers as obvious robbery targets.

The major hurdle to adopt a cash-free vessel is the status quo.

When seafarers have the opportunity to leave their vessel while in port, they often visit a local retail outlet or foreign exchange counter to send money home or exchange currency. And this happens only if they can actually leave the ship or locate a store. Transferring funds while ashore typically involves an exchange of currency and then a transfer. Not the most convenient or cost effective solution.

Crew members do have a choice.

By introducing the ShipMoney Program, shipowners and managers can leverage our proprietary Visa payments platform which offers a robust and very cost effective solution for crew remittances as well as an integrated link with Western Union which crew can access from a phone or laptop without ever leaving the ship. Crew receive preferred exchange rates and ensure that affectionate dollars are received by their loved ones at home on a timely basis. And shipowners and managers can also introduce Captain’s Cards to pay for supplies and other required ship expenditures utilizing real-time funding and reporting functionality.

Surely in such a depressed market we have to address the psychological welfare of our seafarers, affording them the opportunity to save more of their wages, having access to e-commerce can only be a benefit.