Myth and Fact - RightShip

In this article we seek to clear up some common misconceptions surrounding RightShip, the third party ship vetting service.

RightShip, established by two global commodity companies, BHP Billiton and Rio Tinto, is now an integral part of the global shipping industry with some 230 customers from all industry sectors across the globe. When Cargill became an equal equity partner in 2006, RightShip was no longer the vetting tool of the hard commodity players but cemented its position as one of the primary risk management tools of the grain and soft commodity industry.

This article will not address the factors that provide both a vessel’s RightShip star rating and its EVDI as these algorithms are available on the RightShip website (www.rightship.com), but instead seeks to address some common myths.

MYTH 1 – RightShip is only used by the dry bulk industry.

FACT 1 – Contrary to popular belief, it is not the preserve of the dry bulk industry. Its customer base includes trading houses, charterers, ports and terminals, banks, insurers, ship owners and the oil industry. Also, during the past few years it has expanded its brief to include vetting for environmental performance with the introduction of its EVDI (Existing Vessel Design Index) and GHG (green house gas) ratings for the world fleet. According to The Shipping Efficiency Organisation (www.shippingefficiency.org) some 22 charterers, who between them represent 23% of non containerised trade, factor energy efficiency into the vessel selection process. RightShip’s customer base is spread across all continents, from the Americas, Africa, Europe and Asia to its home in Australasia.

MYTH 2 – RightShip approves vessels for its customers.

FACT 2 – RightShip does not approve ships and there is no such thing as RightShip approval. RightShip themselves state that: “RightShip does not ‘approve’ a ship but may recommend it as an acceptable risk to its customer based on vessel particulars, historical performance and individually negotiated customer criteria”.

RightShip rate a ship by evaluating 50 risk factors, providing a risk rating to a customer. The “approval” relates to the criteria set by individual customers not RightShip, each RightShip customer may well have a different risk appetite, which may vary according to vessel size and trade. Any approval generated by the RightShip system is generated according to a customer’s own criteria.

MYTH 3 – RightShip supports ‘RightShip clauses’.

FACT 3 – RightShip does not support the use of so called “RightShip Clauses” in charter parties, this is clearly stated on their website. If pushed by a counterparty to include a “RightShip clause” in a charter party, Members should seek guidance from the Club.

MYTH 4 – RightShip only vet dry bulk vessels.

FACT 4 – This is a common misconception, 40% of all vets made on RightShip are of tankers, with RightShip being one of the larger providers of SIRE reports to the OCIMF SIRE database.

There can be little doubt that RightShip is here to stay. It is therefore important to develop an understanding of how RightShip works so that potential problems relating to RightShip, e.g. RightShip clauses, can be avoided and commercial opportunities maximised.

We trust that this article has cleared up some of the more common misconceptions surrounding RightShip.

Many thanks to Captain Jonathan R Stoneley FNI, Director, Hydra Consulting Ltd for his assistance with this article.

E-mail: jrs@hydracon

http://hydracon.co.uk/