Wilhelmsen Port Services (WPS) is launching a new service for port call and canal fee financing that could free huge amounts of working cash.
The Port Cost Financing model eliminates the need to have capital tied up in pre-funding these costs and cuts down massively on the number of transactions involved, the Norwegian company said.
WPS has teamed up with partner RoundFort Capital, which will fund the final invoices to the port agent on behalf of the customer after approval.
The two companies called this a “significant industry milestone”.
Neal de Roche, president of WPS, told TradeWinds: “Until today, the industry standard has been that vessels have had to pre-fund their port calls, causing large amounts of cash to be inaccessible and tied up with ship agents.”
Now they can pay after the final invoice has been submitted and in a pre-agreed time frame, he said.
Crew wages can also be added, strengthening the offer towards shipowners.
WPS gave the example of a company paying an average of $82,000 for each of 5,000 port calls per year.
Using the new model on a 90-day cycle, $102.5m of working capital could be released by avoiding pre-funding.
Owners can slash the number of transactions they manage from thousands to as few as four.
Challenging tradition
RoundFort has close to 20 years of significant experience in financial markets, de Roche said.
Representatives have also sat on the board of a few shipping companies, he added.
“Offering no pre-funding towards all port calls globally including canal transits to customers at large is a market first; we do not believe this is available from any other players in the market,” de Roche said.
He sees challenging the status quo and continuously chasing opportunities to improve the service to customers as core for WPS.
“It took us a good amount of time to ensure that this new service is fully fit for purpose, and to make it globally available for all port calls,” de Roche told TradeWinds.
“Ever since I joined the Wilhelmsen group as a boarding clerk many years ago and from my time at sea, I have always been motivated about how the overall management of a vessel can be made more efficient,” the president said.
“Pre-funding has always been a topic of discussion with most of our customers, together with how we can optimise this for them in the best possible way.”
And he added: “With this new solution I really believe we are starting to make this happen.
“Highlighting substantial pain points faced by our customers and showing our ability to solve them like we have in this case, to me means we are living up to our vision at Wilhelmsen, which is to shape the maritime industry,” de Roche concluded.
