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A shipping industry where cash does not always need to be King

Errikos Andreakos, chief commercial officer at MarTrust Errikos Andreakos, chief commercial officer at MarTrust

Seafarers have faced unprecedented hardships over the past 18 months amidst the pandemic and quite rightly their wellbeing is now at the top of the industry agenda, writes Errikos Andreakos, chief commercial officer at MarTrust.

The emotional impact of being stranded and not seeing their families has been immense, but it has also highlighted the significant issues of seafarer pay, and the reliance that their families have on their wages to survive. The Mission to Seafarers 2021 Quarter 2 Happiness Index laid bare some of the challenges they were facing; withholding pay, underpaying, concerns as to whether they will get paid.  While set against the backdrop of the pandemic, it is also an extension of the industry’s outdated system for paying crew salaries – and suppliers - and the management of cash onboard vessels. 

Shipping relies upon multiple daily microtransactions to pay their suppliers, agents and salaries for crews to ensure smooth and reliable trading.  However, for the majority of the 60,000 commercial vessels, that means carrying billions of dollars of cash onboard.  Not only is this a security risk and administrative burden, it’s also very expensive when transaction and FX costs are between 3 per cent to 5 per cent.

In conjunction with this, most crews are paid via cash distribution onboard the vessel as well as via a wire transfer back to their families.  These are also expensive and inefficient and can delay payments.  And if a company pays a seafarer in dollars, which requires currency conversion at the receiving bank, they face exchange rate costs, which isn’t good enough when every dollar matters to them, particularly in the current environment.

MarTrust

This is where digital solutions must come to the fore, so we can move away from a ‘cash is king’ intensive industry.  That’s why at MarTrust we recently launched a next-generation payment solution that enables companies to transfer funds to multiple accounts and execute payday and cash-to-master (CTM) transactions to anyone involved in the day-to-day operation of a vessel, with complete control, transparency and security. 

Comprising an e-wallet and card, it is an integrated payment solution, which optimises the entire payroll process.  Accessed via a web portal or mobile app and seamlessly integrated into existing systems,  funds can be easily and securely transferred to crew to pay salaries, bonuses, overtime and cash advances.  It’s a much quicker process than traditional routes, and provides seafarers with complete control of their funds, including the ability to quickly transfer money to anyone they need to at any time, such as their families.  It also provides security and peace of mind, as they don’t have to store or manage large amounts of cash.  The debit card enables them to access cash at any Mastercard supported ATM around the world, and it can be topped up in eight different currencies making it a local solution in these countries, which reduces fees.

The e-wallet will also include a new Salary on Demand service for seafarers to track and use their income and align it with their expenses. It also helps shipping companies optimise their cash flow, eliminate the costs and hassle associated with maintaining salary advances, and save money on banking transfer fees CTM payment charges.

While solving the issue of crew transfers is clearly a priority, we must look at every opportunity to improve their welfare and wellbeing while they are at sea.  Ensuring that they get paid on time, that their families are looked after and have access to funds is a critical part of this. Embracing digital solutions is the key to delivering it.

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