In addition to port payments post-fixture, crew wages need to be paid and vendor invoices need to be settled. These are also resource-intensive processes. But again, making payments is time consuming, prone to human error, likely to result in delays, and ultimately can be very costly for the organisation. Particularly when it comes to paying crew, timely and accurate transfers are essential to ensuring crew morale is maintained. The industry is already experiencing a crew retention issue and seafarers that are not paid on time are more likely to leave.
The payment process is about much more than paying salaries. It’s about keeping those at the core of the vessel’s operation happy, giving them a sense of security, and providing them with a place of work they do not want to leave. Finding and hiring new staff is another costly process and one that can be minimised by paying crew on time and in a way that makes it easy for them to transfer money home.
How standard payment processes in shipping impact organisations.
Payments are time-consuming and complicated. Paying 20 different people is a challenge, but imagine a vessel with more than 100 staff to pay. Here’s why standard payment processes should be improved:
A. It’s Time- Consuming And Prone To Error.
Manual data entry and processing of payroll takes time and often results in errors. It adds an additional burden to the administrative team. Incorrect payments and/or delays cause financial disputes, and administrative headaches, not to mention the impact on the crew if they are not paid on time.
B. Lack Of Transparency With Cash.
Some cash payments lack a clear audit trail, making it hard to keep track of who’s been paid what and when. Inefficient record keeping can have financial reporting and regulatory compliance implications.
C. Poor Currency Exchange.
On the whole, crew transfer money to local currency if paid in USD, EUR or another currency used by the company. Inefficient currency conversions increase the financial cost to the crew in receiving their salary.
D. Lack Of Flexibility And Security.
Standard bank payments do not allow crew to access financial services and to transfer money while at sea. Not to mention the security risks of carrying around cash rather than in a digital wallet and accompanying card, for use when in port.
E. Crew Retention Issues.
Crew that are not paid on time or the correct amount are more likely to feel dissatisfied with their job. Not only is this likely to impact their morale, but financial stress is more likely to catalyse costly mistakes on the job. Repeated issues with payments could cause individuals to seek out other employment opportunities. A high turnover rate is extremely costly for a shipping organisation.
This is where digital technology plays a key role. By improving standard processes, the crew can better manage their money, and shipping companies can avoid getting stuck in complex payment issues. Bourbon Marine Services Greenmar, MOL, ABC Maritime, and Swire Shipping, to name a few, have digitally transformed their payroll payments by implementing a digital E-Wallet from MarTrust, a Marcura brand.
The E-Wallet and prepaid card enables crews to receive their payments much faster than traditional banking and is much safer than handing out cash. By receiving payments in their chosen currency, they secure much greater control over their money. For the ship owners and operators, the digital payment method reduces risk and lowers transaction costs.
For a more detailed insight and understanding of the topics briefly discussed in this article, please refer to our thought leadership report in partnership with Marcura, Navigating New Financial Seas. This comprehensive guide demonstrates how digital solutions can optimise shipping operations from the pre and post-voyage fixture stages, through to the voyage itself, to ensure financial success. The full report can be downloaded below:
