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Asger Mariegaard
Contractual Advice Manager
Copenhagen, Denmark
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Are you a port agent? Do you have outstanding disbursements account balances (owed to you)?
Published: 06 January 2025
Every year, BIMCO helps members to collect millions of dollars owed to them.
Did the owners or the time charter operator of the vessel cover the disbursement account of the port call in the way you, as port agent, expected, or did something fall between the cracks?
Maybe there was something that couldn’t be documented?
The 300 most recent cases handled by our intervention service resulted in a successful collection in 40% of the cases. In 25% of the cases we issued a Notice to Members informing about undisputed, unpaid debt.
It was only in the remaining 35% that it was not possible for us to assist, resulting in an “impasse” for various reasons.
Many of these cases were about disbursement accounts balances. Typical pitfalls in these cases include:
The owner of the vessel was not identified
Ahead of the port call the port agent simply omitted to ask to whom the invoice should be issued and obtain the contact details. In other words, the name of the principal or the name of the counter party on the contract was unknown.
The appointer of the agent was not sufficiently identified
The party in that role obviously has a crucial role to ensure that the payment eventually will take place. The appointer is not necessarily also the guarantor. Whenever the owners are in fact a brass-plate company, it can make a significant difference that the appointer in the agency agreement contract is also the guarantor for the payment and not appointing “as agents to owners”.
The agent omitted to undertake financial risk management and know-your-customer (KYC) analysis
Sometimes an owner asks the cargo owner or charterer to provide the port agent with funds for the port call (for subsequent deduction of same in the freight). Such an arrangement may perhaps indicate that owners are low on cash. It has been seen before that such an arrangement has been rushed through without the agent and owners formally entering into an agency agreement contract. And did you as agent in such a situation consider the financial exposure should the shipment be cancelled? Or that the cost of vessel’s port stay could turn out to a higher amount than the freight revenue?
The bottom line
Crucial information is in many cases omitted from the agency appointment agreement, so it can be no surprise that it can then be difficult to collect the disbursement account balance.
One way of decreasing the risk of having wrong or too little information is to use a proper Agency Appointment Agreement form. See for example the Agency Appointment Agreement.
In conclusion
Even though the BIMCO Intervention Service is available to members, it can’t cover all scenarios or cases where payment is not received.
Any port agent should always ensure that the contract is crystal clear - not least in respect of who will ensure that the payment is made on time and who is the principal and the guarantor for the payment. It goes without saying that the contract should include full contact details of the involved parties.
If you are in need of assistance in collecting undisputed debt and are a BIMCO owner, agency or broker member, please don’t hesitate to get in touch with the BIMCO Intervention Service.
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