Big shipping company delay payment

[kendrawph]

I need some advice. As you know, the shipping industry is not doing well. I am a small shipping contractor and we have completed all our tasks to build the ship. The ship owner or main contractor (i call them the big boys), keeps delaying our payment for more than 6 months. Everytime we ask for payment, they will give all kinds of excuses like quality not good, and request discount of 10%. We are talking about few hundred thousands, and even 5% discount is huge. We have to pay our workers salary and levy, and right now need to use our own money to manage the cashflow. Banks loan are used to the max, and now presssure is very high. If we use lawyers to settle this, we end up have to waste unnecessary $$ and the big boys may end up not paying at all. These big boys are driving us contractors crazy. Any idea ?

 

[akwl88]

which ship owner?

 

[alexchia01]

I need some advice. As you know, the shipping industry is not doing well. I am a small shipping contractor and we have completed all our tasks to build the ship. The ship owner or main contractor (i call them the big boys), keeps delaying our payment for more than 6 months. Everytime we ask for payment, they will give all kinds of excuses like quality not good, and request discount of 10%. We are talking about few hundred thousands, and even 5% discount is huge. We have to pay our workers salary and levy, and right now need to use our own money to manage the cashflow. Banks loan are used to the max, and now presssure is very high. If we use lawyers to settle this, we end up have to waste unnecessary $$ and the big boys may end up not paying at all. These big boys are driving us contractors crazy. Any idea ?

This is common is the business world. The big boys is trying to squeeze the small boys as much as they can; and if you close down, even better for them, they don't have to pay.

However, sometime this tactic may not be the big boss's idea, but the working of a few small employees, who think they are doing a favor for their company. If you can reach the decision maker, the big boss and tell him the situation, he may release of the money immediately.

If this does not work, then you may have to take more drastic measures.

You can approach the Singapore International Arbitration Centre.

 

[wahkao3]

for people who dont pay my bills
very simple. just withhold delivery of any future orders

they will be desperate and pay up

 

[kendrawph]

which ship owner?

There are just a few of them over here.

 

[kendrawph]

for people who dont pay my bills
very simple. just withhold delivery of any future orders

they will be desperate and pay up

You are right, and this works well with SME companies. As for shipping industry, it does not work this way especially when the person in charge tries to be funny. He will give 40% payment, and he will find fault when you ask for remaining amount even when job completed. If you are obedient and continue on for new project, he will make use of the remaining amount to slowly give you. If you don't , you can forget the remaining amount and close the company. This is how it works - the dark side.

 

[kendrawph]

Hey, you are right! thanks for the tips. They are just waiting for small contractors to close down so that no need to pay. Now, see who has the most cashflow to survive. We manage to reach the decision maker, and this guys is a master of tai chi. He stunned us by asking us to go to his manager (much smaller position), and he say if the manager agreed then he pay. Wa.. the manager shiver and said to us privately that his boss wants to make use of him and the manager can resign. The decision maker is ultimate.

 

[alexchia01]

Hey, you are right! thanks for the tips. They are just waiting for small contractors to close down so that no need to pay. Now, see who has the most cashflow to survive. We manage to reach the decision maker, and this guys is a master of tai chi. He stunned us by asking us to go to his manager (much smaller position), and he say if the manager agreed then he pay. Wa.. the manager shiver and said to us privately that his boss wants to make use of him and the manager can resign. The decision maker is ultimate.

If the decision maker is the ones that doing deed, then beside arbitration, the next thing to hit them where they scare the most. Their reputation.

Hit them on their reputation.

Bosses are scared of bad reputation, especially when the entire world know of their bad doing.

Post their deeds online, on their facebook page, on forums, tell all their sub-contractors about their behavior and warn everyone about their bad practices.

When their news goes viral. They can't get subcontractors and projects, they'll have to come clean to save their business.

With the power of internet. These days, small players have a powerful voice.

However, you must tell the truth and not create fake news, else it'll come back to bite you in the ass.

Good luck.

 

[kendrawph]

This will be the last resort when lawyer letters do not work.

 

[zuoom]

Was the job done properly?

 

[sgdividends]

Tough. If u want to continue relationship , lan lan. Now few jobs too. You have no bargaining power.

Everything u do will cost u. Guess hitting his reputation with truth is the least cost. I wonder what happened to the Marco polo oil rig case with sembcorp marine. Marco polo marine seems like your client example Didn't follow up

 

[Majestic12]

If you broadcast their misdeeds to the world, be prepared to be shunned by the rest of the industry. Other companies will be thinking: if you can do this to a big boy, what about me?

This method of doing business is common in many industries, such as real estate and property development for instance.

How can we hedge?

- Have multiple moderate-sized clientele instead of a single large client
- Avoid going all-in or betting the ship on one single deal to keep the company afloat

Prevention is truly better than the cure here, but as you know in business, it is not always possibly applicable.

 

[Wood41]

Apple & Walmart better ?
They have more than enough but they squeeze the suppliers.

 

[FP_IFA]

I think the shipping company currently don't need that ship now. Probably should source for alternative buyers.

 

[kendrawph]

I think the shipping company currently don't need that ship now. Probably should source for alternative buyers.

Really have to pray that this won't happen. :S

 

[kendrawph]

Apple & Walmart better ?
They have more than enough but they squeeze the suppliers.

yah.. when you have many mouths to feed, any boss just have to bow down

 

[kendrawph]

If you broadcast their misdeeds to the world, be prepared to be shunned by the rest of the industry. Other companies will be thinking: if you can do this to a big boy, what about me?

This method of doing business is common in many industries, such as real estate and property development for instance.

How can we hedge?

- Have multiple moderate-sized clientele instead of a single large client
- Avoid going all-in or betting the ship on one single deal to keep the company afloat

Prevention is truly better than the cure here, but as you know in business, it is not always possibly applicable.

You are so right. Single big client had been good, until 1 new joker replaced the old head. **** happens after that.

 

[kendrawph]

Was the job done properly?

Yes.. job done, but shipping industry has dark side. Only people that work inside will tell you.. even if job done with excellence, you can be 'penalized' for anything. yes.. anything..

 

[kendrawph]

Tough. If u want to continue relationship , lan lan. Now few jobs too. You have no bargaining power.

Everything u do will cost u. Guess hitting his reputation with truth is the least cost. I wonder what happened to the Marco polo oil rig case with sembcorp marine. Marco polo marine seems like your client example Didn't follow up

You seems to know this industry well.. In army, it's called suck thumbs.. Some of my fellow contractors are struggling to meet the end needs.. Sending workers back is the last resort. They are our greatest assets.

 

[wahkao3]

Yes.. job done, but shipping industry has dark side. Only people that work inside will tell you.. even if job done with excellence, you can be 'penalized' for anything. yes.. anything..

yes, really anything......