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Differences between Ship Management companies VS Ship Ownership Company

If you’re Planning to Join Merchant Navy, chances are you’ll be Knowing nothing about it because of No one really tells Which is better Ship Management companies or Ship Ownership Company?

Don’t Worry, IndianMerchantNavy.org is making efforts to make sure No one is being scammed by fake merchant Navy Agents and Websites.

When a new aspirant wants to Join Merchant Navy as a Officer or as a Crew (be it Deck side or Engine Side). He needs to Choose or at least Know the Differences between Ship Management companies VS Ship Ownership Company or Which would be better for him/her in Long run, as the career progresses.

In the Maritime Industry, there are Two Different types of Shipping Companies:

  1. Ownership Shipping Company – Ownership companies have their own ships and look after all the aspects like crew and technical.
  2. Ship Management Company – Whereas management companies don’t own the ship’s but help vessel owners in vessel management like crew and technical. Ship Management Companies help Big/Small Ownership Companies run their Ships in Cost Effective manner.

1. Ownership Shipping Company

A ship ownership company is a business entity that owns ships or vessels. These companies are responsible for acquiring, financing, and maintaining the ships. Ship ownership companies bear the legal and financial responsibilities associated with owning a vessel, including compliance with regulations, insurance, and liability for incidents.

They may operate the ships themselves or contract with ship management companies to handle the operational aspects of the vessels.

Just like any other business, the occupation of various levels here has no ownership limits. A businessman / businesswoman capable of affording a vessel sailing in international waters, is perfectly eligible to do so, as long as he/she abides by the IMO laws for safety and pollution avoidance.

Chevron, Shell Shipping, Torm, BP Shipping, are some of the popular Ownership Shipping Companies.

2. Ship Management Company

A ship management company is a specialized firm that provides various services related to the operation and management of ships on behalf of ship owners. These services can include crew management, technical management, commercial management, and financial management.

The primary goal of a ship management company is to ensure that vessels are operated safely, efficiently, and in compliance with relevant regulations and industry standards. Ship management companies may work with a variety of vessel types, including cargo ships, tankers, container ships, and offshore vessels.

Differences between Ship Management and Ownership Shipping Companies

Because both sorts of businesses operate in the marine sector, they represent two sides of the same coin. An Ownership Shipping Company, often known as an owner, is the entity that purchased the vessel and thus is the in-charge of it and performs tasks like regular maintenance, timely inspections and onboarding of crew.

In essence, this body (Ownership Shipping Company) seizes control of the ship. The profit or loss they make is solely theirs; they are the ones that pay for repairs, spare parts, import duties, and the crew’s wages.

A Ship Management Company, on the other hand, is essentially an operator who operates the vessel on behalf of the owner who leases out the ship to them in exchange for an independent payment or a commission. Profits and losses are often shared between the two bodies based on the terms of their contract.

To Summarize, here is a quick look over the major differences between a Ship Management Company and an Ownership Shipping Company :

Ship Management CompanyOwnership Shipping Company
1. These companies ‘manage’ a vessel or its services on behalf of an Owner who has leased a ship purchased by him/her for a given period of time to the Company.Ownership Shipping companies purchase the Ships and choose to Manage and Run it or They may Hire a Ship Management Company to run it.
2. It is at the discretion of the Owner, whether he wishes to lease the entire ship or a portion of the vessel’s services to the Management Company. 
Since the vessel has been purchased by them, they are the central decision-making body for the ship.
3. The Management Company is bound by a contract and pays an annual sum, mutually agreed upon by them, to the Owner.

Profits and losses are often shared between the two bodies based on the terms of their contract.
Any profit or loss that the Ownership Company makes, is solely theirs.
4. The Ship Management Corporation is responsible for overseeing the ship’s machinery maintenance, and for paying for all of the expenses during the lease’s duration, on the behalf of the Owner.Being the Owning Entity of the Vessel, they are the ones that pay for repairs, spare parts, import duties, and the crew’s wages.
5.  At Ship Management Companies, the income might be a little lower, but it is compensated by the promotions, which are typically better.Typically, they pay their crew higher wages and sometimes, also provide with comparatively better living conditions. However, the promotions here could be slower.

Ship management companies and ship ownership companies play distinct roles in the maritime industry. Here are the key differences between the two:

Ownership vs. Operation

Ship Ownership Company: A ship ownership company owns the vessels. They are responsible for acquiring, financing, and maintaining the ships.

Ship Management Company: A ship management company is responsible for the operational management of the vessel. They may operate ships on behalf of owners, providing services such as crewing, maintenance, and logistics.

Also read, Why Ship owners choose a Ship Management Company to operate their Ships?

Legal and Financial Responsibility:

Ship Ownership Company: As the owner, this company bears the legal and financial responsibility for the vessel, including compliance with regulations, insurance, and liability for incidents.

Ship Management Company: The ship management company typically operates under a contract with the owner and is not usually directly responsible for the legal and financial aspects of the vessel.

Crewing and Manning

Ship Ownership Company: The owner may choose to directly manage the crew or hire a ship management company to provide crewing services.

Ship Management Company: Responsible for crewing and managing the personnel on board the vessel, ensuring compliance with regulations and standards.

Technical Management:

Ship Ownership Company: While owners may handle technical management, including maintenance and repair, many choose to outsource this to a ship management company.

Ship Management Company: Provides technical management services, ensuring the vessel is maintained to regulatory and operational standards.

Commercial Operation

Ship Ownership Company: Responsible for the commercial operation of the vessel, including chartering and trading.

Ship Management Company: May assist in commercial operations, such as chartering, but primarily focuses on the operational aspects of the vessel.

Ownership Shipping companies are like Google, Microsoft, Meta which are known globally and everyone wants to work with them but Not Everyone get a Job there!

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