The Shipping Man by Matthew McCleery

Author:Matthew McCleery [McCleery, Matthew]
Language: eng
Format: mobi
Publisher: Marine Money International
Published: 2013-12-22T00:00:00+00:00

Chapter Thirteen The Low Cost Operator

Jimmy Chen was always startled by the violent and shrill ring of the old black telephone sitting on the left hand corner of his sprawling wooden desk.

Before picking up the call, he glanced over at the brass ship’s clock on the wall, a gift from his insurance broker. He was disoriented when he saw that more than one hour had passed since he began staring vacantly through the window at the sooty marine terminal he had inherited from his father three years earlier.

The phone rang again. Jimmy had been forced to sack his secretary two weeks earlier as part of a broader effort to reduce costs, so he was now forced to decide whether to ignore the call or pick it up. As a man with narrowing options, he opted for the latter.

“Hello?” he said with feigned confidence after he snatched the phone up on the third metallic ring. “Hello, my friend, I am Spyrolaki from Piraeus,” the stranger on the other end of the telephone said with an accent that combined British and Greek, carefully pronouncing each word as if they might break.

“Good afternoon,” Jimmy said, working hard to identify the vaguely familiar name. “But I don’t need to charter any more ships, not at the moment. I am full of ships,” he added, sounding queasy. “But thank you for calling.”

As Jimmy watched four 25-ton cranes load a Handy size bulk carrier outside his window, he used his pencil to scratch out a quick calculation of how much money he would lose on the upcoming voyage: $280,000 (including the bunkers).

It was at times like this when he questioned his decision to go into the industrial commodity business after graduating from Harvard five years earlier. He could have stayed in New York and joined one of his friends at a hedge fund or an investment bank, but instead he heeded the call of familial duty.

After all, his siblings had felt no obligation to carry on his father’s legacy. His sister had become an architect of some renown in the Middle East and his brother was a highly sought after neurosurgeon. Yet, here he was working like a dog, like a character in a Dickens novel, just to lose $280,000 every time he loaded a ship.

For two generations, Jimmy’s family business had been pleasantly predictable, prosaic and profitable; selling bauxite Freight on Board (FOB) on the dock and making a small margin. But when his input costs began to soar in 2004, on everything from labor to tax to electricity, his margins got squeezed; that was when Jimmy Chen made the fateful decision to sell his material basis Cost and Freight (CNF) by offering his clients a fixed price on the commodity and the ocean freight required to deliver it to them.

What would seem to a layperson as a relatively subtle change in delivery terms and acronyms, like including the cost of postage when mailing a package, was actually tantamount to Jimmy wagering his family’s multigenerational business in the highest stakes gambling casino in the world – the spot market for dry cargo ships.

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