Shipping Pool



A shipping pool is defined when a group of similar merchant vessels are grouped together for administrative purposes. According to a prearranged agreement, their earnings are pooled and distributed to the vessel owners. In other words, a group of ship owners pool their vessels wherein the earnings are pooled together and distributed among them on a pre-approved weighting system. Here similar vessel types and sizes of various ownerships form one alliance with the aim to minimise risks and maximise revenue.

Characteristics of a Pool

  • Similar Tonnage
  • Central Administration (Pool Management Company/Operator)
  • Joint Marketing
  • Negotiation of Freight Rates
  • Centralization of Voyage Costs
  • Freight Collection
  • Weighing System
  • Revenue Distribution
  • Fair Share.

Advantages

  • Ability to undertake CoA
  • Economies of scope
  • Diversification and Risk spreading
  • Ability to benefit from volume discount 
  • Secure cash flow even when vessel is unemployed

Disadvantages

  • The fear of losing ship owners’ identity 
  • Decision making process 
  • Unfair distribution of profits 
  • Long-term commitment 
  • Loss of market presence of know –how
  • Cultural differences

Though there are disadvantages, Shipping Pools are an unavoidable part of shipping which cannot be overlooked as they provide access to remote markets and cargoes, as well as collective knowledge and expertise. It is important to note that owners can benefit from being members of a Pool as they are being provided with security and stable revenue in a volatile market.

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