HubSE marketing director of demurrage Phil Stalley challenges those in the demurrage claim chain to throw off the culture of slow payments and embrace technological change
Almost everyone I speak to has a backlog of demurrage claims. This is because claims locked up in a trading chain always proceed at the pace of the slowest participant. Owners will always say they are not being paid quickly enough and sometimes with justification. There is an attitude that pervades the business of shrugging and saying “Well, it’s only three months old!”
What informs this attitude? Many companies are under resourced in the claims departments and some companies simply don’t want to pay demurrage - or will put off payment until the cash from their counterparties has arrived. It is also the case that negotiations are often prolonged and during the life of a claim, staff may change, further hampering resolution. Dusting off an elderly claim to read the background on often contentious items takes time and experience. New staff are motivated by results, which often means working the newer, more straightforward claims.
What can we do about this industry malaise? It needs real determination on all sides - owners, brokers and charterers - to bring about change. Merely accepting the backlog of claims slows down the business and is a drag on morale for the teams assigned to look after these claims. There is a real risk that the longer a claim is outstanding, it is either time barred, or the counterparty goes out of business.
Digitisation and blockchain may seem like the answer, but is the industry ready for this? As a software provider, HubSE knows there are already many solutions available that could speed up data flow and transactions. But there is a reluctance of companies to be leaders and step into this space. Shipping is a conservative industry and companies would rather wait for others to kick off the process.
HubSE can help resolve the backlog through its Hub Exchange software. This product will speed up the negotiation of claims and remove a lot of uncertainty around time bars and other hazards that can foul up the claims process. The idea is relatively simple - as a member of the Hub Exchange service you can exchange your claims electronically.
But, you say, we already do this by email. That may be true, but when you send your claim by email are you:
In the management of a claim there will come a point when all the documents must be in one place, together with the entire history of the negotiations. With Hub Exchange, there is no need to trawl through shared folders or personal emails; everything you need is on the Hub.
The system is cloud-based and accessed through a browser and those HubSE customers already using the Claims Management System have the Hub already built in. HubSE will provide application programming interfaces to connect individual claims management systems to the Hub. Negotiations take place through an instant messenger-type system.
HubSE recognises that speeding up communications and having instant access to all necessary documents in one place is not going to clear the backlog of claims overnight. There will always be counterparties who regard opaqueness and delayed payments as proof that they are experts at playing the system. But embracing the cloud will save you time, which you can use to focus on those malcontent counterparties.