Zero disclosure domiciles, such as St Kitts & Nevis, can keep the performance of your vessel out of the public eye and pay less tax.
Don't you just hate it when something seemingly straightforward is made much harder than it needs to be?
I got on a bus this morning to travel a few stops to the train station. I left my Oystercard on the dresser so handed the driver (a dead ringer for the rapper IceCube as it happens) a crisp beautiful new fiver. He refused to accept it as he said he didn't have the change, so I had to walk. I had the money, but he wouldn't take it.
Bit of a pain really.
Reminded me of the many things we take for granted in our wonderful world of the game of shipping that make my life, and the lives of my fellow bunker professionals, harder than they need to be.
The concept of single-shipowning companies are well known and well discussed. Essentially it is where you place your vessel asset owning company offshore somewhere like Liberia, Cyprus, the Marshall Islands or St Kitts & Nevis, for tax reasons.
Since they are zero disclosure domiciles, you can keep the performance of your vessel out of the public eye and pay less tax, thus giving you an advantage. Where issues arise is when you then demand credit for bunker stems for your vessel via the offshore company.
It is the market's decision to use such vessel ownership mechanisms, yet systemically we cannot give them the credit they want on that basis
Credit insurers will not generally cover such risk so inherently the risk for the bunker company is higher. So you go back to the customer and you explain that you cannot offer the 45 or 60 day terms that they are asking for because you can't insure it and they then criticize you for a lack of support.
It is the market's decision to use such vessel ownership mechanisms, yet systemically we cannot give them the credit they want on that basis, unless we want to do uninsured business and take a far higher risk in the process. A risk that isn't nearly being covered by the margins we are able to make on the account.
Or the case where some owners keep vessels on well past their scrap-by date operating them at the shallow end of the spot market. Freight is often paid later at this end of the market, where the charterer does not want to pay the going rate and chooses older tonnage at a slightly lower rate. They very often pay late.
Problem is the owner comes to the bunker markets asking for credit to cover, and finds most are unwilling to give credit for this vessel because they are a higher risk (of scrapping without paying). So often the more they need extended credit support from the bunker companies the less the (smart) bunker companies are inclined to give it. They chose to do things in this way, yet get upset when it creates issues for us.
You are damned if you do and damned if you don't. Of course we know why shipping companies do it. They won't change. It is how it is and we cannot change it. But what's a credit manager to do?
In either case you probably walk away and the trader is disgusted, making that face they make when they want you to KNOW they think you just stole food from their children's mouths. We won't do the business, the trader will (probably) starve to death, cold, homeless and alone, plus it's a lot of work hunting around this new-fangled interweb thingy for any scrap of info that can give you a lead which is ultimately a waste of everyone's time.
What's the point? What is there to gain, in this day and age? Daft really if you think about it.
Perhaps Ice T had it the wrong way round. We do end up hating the player not the game.