Mr. Gbenga Femi Olu is the Head, Business Development Unit of Tentropics Marine Limited, a registered marine operations company in Apapa since 2013. In this interview with MMS Plus Weekly he expatiates on ship chandelling as a profession and what it takes to succeed in the business.
How To Be A Ship Chandler
What is ship chandelling?
Ship chandelling simply put is a process where the chandler, that is the name of the person who undertakes ship chandelling business, supplies to a vessel products and equipment needed on board, this means: provisions, disposables, perishable items and even maintenance parts because the crew aboard a vessel sometimes do not have access to land for months so they need to feed and the chandler provides things that are very essential on board, that is what chandelling is basically about.
What role does ship chandelling play in shipping business?
I would say to a large extent, that chandelling business is very vital in the shipping business considering the fact that you cannot be on the vessel for the period of one voyage without running short of food and water, so there is no how you can disassociate chandelling from shipping.
What’s the difference between chandelling and bunkering?
The difference is that the chandler supplies provisions and food items, but bunkering is the process of loading fuel into a vessel because a lot of people misinterprets bunkering as illegal, bunkering is not illegal, as long as it done through the appropriate authorities, bunkering is just a business that involves fueling a vessel and suppling fuel to a vessel, there is also what is called water bunkering. Water bunkering is a scenario where, in as much as the vessel is on top of water people think maybe it gets water directly from the sea, you have to physically transport water in tanks to the vessel where it is loaded on board, this is what the crew use for bathing, cooking and washing.
So can a chandler function as an oil bunker or water bunker?
It depends because there are different bodies that handle each with different requirements. So, if you decide to do bunkering alongside chandelling, that means you have to belong to the two bodies and meet their individual conditions, so you would not have issues with them when you are conducting your business.
So who can be referred to as a ship chandler?
A ship chandler is someone who carries out the business of providing services to vessels in terms of supplying their necessary needs like provisions, disposables and sometimes can be extended to suppling maintenance parts of the vessel, that is, engine parts and other essential items. A ship chandler has to be someone that is trusted by the ship owner because food poisoning is something they try to guard against.
The quality of what is supplied to them is very important and that is why when a chandler is able to come on board, it is very important that he maintains a high level of hygiene and timeliness of delivery on board. The vessel does not have the luxury of time because they have to quickly disembark their cargo and go back to where they are coming from.
Is ship chandelling studied in any Nigerian university?
As far as Nigeria is concerned, I don’t think it is studied in any university because a lot of us went into this profession without prior knowledge of the business. Also a lot of people in the maritime industry in Nigeria do not have a good exposure to all the aspects of maritime. If you ask around in the industry about chandelling, you be will surprise to discover that a lot of people do not have a full grasp of what it is about except they do a little research. So, there are a lot of grey areas in maritime that has not been studied but with a little idea people now use the internet to get the necessary additional information. When it comes to learning the trade, I don’t think it is studied in any Nigerian school at the moment.
What are the requirements necessary to be a chandler?
To be a chandler you have to first of all register with Nigerian Maritime Administration and Safety Agency (NIMASA), as a shipping company and secondly you need to register with the Nigeria Customs Service (NCS), because these are the authorities that issue the permit as they are in charge of the inland waters and coastal water ways. Once you have acquired your permit, you can start your business, to be acknowledged by the ship owners, they need to see these documents before agreeing to do business with you.
How can these licenses be obtained?
Lately there has been an embargo on license issuance as a result of the fact that the association came up as a body to write a petition to the CGC customs Alhaji Abdullahi Dikko, concerning the activities of touts who do business without the necessary papers, this has been adversely affecting their business to the extent that they had to speak up.
New information from the Customs is that there is the likelihood of a review of the fees and the processes of getting these licenses but before now, it was about N500 paid officially to Customs and for NIMASA which is the first port of call, charges are according to categories, for instance, we registered as a shipping company and it cost us about N120,000 and other additional fees incurred from documentation.
What national or international association governs ship chandelling?
It is not international and it is called Ship Chandlers Association it is a local association with branches all over the port areas in the country, like Port Harcourt , Warri and Lagos, with a national office in Lagos, they conduct elections and have a president just like any other association, they have their network in all locations where there is oil related businesses and vessels and all chandler have to belong to this association to operate unobstructed.
Would you say they are organized?
To a large extent if I am to rate them from 1 to 10, I would say 5 because the category of people there appear unskilled, I mean they are not well read because I have been opportuned to attend some of their meetings and although some of them are quite knowledgeable a lot of them just stumbled into the trade and grew in the business without any formal education in their structural background.
What capital base would a person require to be in this business?
For capital base, it is huge considering the fact that when the opportunity comes you will bid, it also depends on where you want to start from, if you want to start big, where you are given a proforma invoice to quote prices for items needed on board a vessel, the money is in millions of dollars. Most of the time, biding is in hard currency because the vessels are coming from overseas and they will have to send the requirement of what is needed on board ahead before they get here, so it is expected that all the items are ready before they get here and if by that time there is no funds to meet their needs, it becomes a challenge.
So, I think capital is a function of where you want to fit in, if it is for local and small transactions, it is less expensive to manage but a lot of money is still involved, for someone who wants to start small it is also important to consider that, to get chandelling jobs you have to reach out to shipping companies and they will only give you jobs when they have a level of trust in your ability to deliver quality products based on their terms, once that part has been settled with a reasonable sum of between N5million to N10 million the business will be good to go.
What other requirements are necessary?
You do not need to have a boat of your own, you can always hire one but there are other thing that you are expected to have; you need an office space that is equipped with a deep freezer, a power generating set, a store for the non-perishable items. The place has to be very clean and hygienic because the ship owner or his representative will come for inspection, the cost of securing the office space and equipping it, is key.
The freezer has to the movable type that makes it easy for products to be transported from point A to point B and of course consideration has to be made for the cost of logistics because by the time the chandler gets a job he has to go off shore to make delivery to vessel.
What is the stage by stage process of ship chandler?
The chandler has to register his business, get his office equipped and get recognized by ship owners. When a chandler succeeds in identifying a prospective client, he markets his services to the client he submits his proposal and meet with the ship owner, after which, the facility of the chandler is inspected.
The next stage is presentation of a Proforma Invoice from the ship owner to the chandler indicating what items the vessel will require the chandler to supply, he now bids by quoting prices for the different items on the invoice. If the bid is successful, the ship owner communication back to the chandler, who gets a period of time to either accept or decline and once he accepts, the date of delivery and location of dispatch will be stated on the letter, the chandler now has the responsibility of working within the time frame of the vessel.
Considering the turnaround time of the vessel what is the adequate delivery time for the chandler?
It varies because there are bottlenecks in the trade, there are scenarios where you are trying to meet up with delivery deadline and you are stopped on the way and requested to present one document or the other and even when you have it, in the Nigerian factor you might still be delayed for no reason.
So if you know you have a vessel to supply to, it is better to move early, if for instance a delivery is to be made tomorrow it will be best to be ready and close by a day before, so that as the vessel docks delivery is made immediately, the chandler should already be standing by at the dock before the vessel arrives.
How does the vessel owner make payment to the chandler?
Payment is usually made after delivery, the ship owner is granted a grace period of not less than 30days to pay the chandler for the supplies and his services.