Delayed Payment a norm rather than the exception - the desperate state of a supplier
We are a 112 year old company and have since been in the service of the Indian Marine Industry.
What is sad that though we do our work with pride and dedication; be it electronics service or gyro servicing or lifeboat servicing or liferaft servicing etc. which is so critical to both safe communication and navigation of a ship and to its overall safety - no ship owner or purchase manager even appreciates this and takes cognisance of the significance of our contribution.
By this I mean, when the job needs to be done; there are a lot of emails going back and forth with regard to dates, agent details, radar faults, gyro details, makes of liferaft and manufacturer authorisation for lifeboats etc but once the job is completed and it is billed - there is complete silence.
Needless to say Indian Ship owners except the Great Eastern Group; never pay on time. And once the agreed 30 days is over and we begin gently reminding them for payment, another month goes by.
Then after a duration of 60 days we will be told that the bill is incorrect - the address is wrong or the entity needed to be another company and so on and so forth. This translates into another 30 days of back and forth paperwork. Once this is completed then we are told that the bill is finally accepted and since it has just been entered into the computer system- it will take another 30 days for fulfilling all in house criteria before it is sent to the accounts department for payment.
After several rounds of follow up and email reminders, finally we see the payment being credited to our account.
If it is a Government department no one even feels that anything wrong has occurred. They blame the system and one officer will blame the other. At one of the most respected public sector shipping company, we have had bills that have been due for over 360 days.
How can any company do legitimate and ethical business if the payment is so skewed? Especially when in a country like India the rate of interest is extremely high and cost of funds has sky rocketed ?
What actually gets me extremely worked up is our Defense sector. (With the exception of the Indian Coastguard. This organisation is outstanding in its respect for suppliers.)
Every tender has its terms and conditions; be it for sale of equipment like Fleetbroad or Radars or for Services like Liferaft Servicing or Fire Fighting Services.
One of the terms in the tender categorically state that payment will be done in 30 days.
Yet when it comes to payment-the Defense personnel who are normally very good - will put up their hands and say - bill has been sent to CDA.
CDA will raise the most innocuous query; totally insignificant and the bill is then tossed between the Navy team and the CDA team. You are extremely lucky if it is not lost in between.
When finally this merry go around is over - and the bill finds itself firmly lodged in the accounts department and is "ripe" for payment, we are coaxed into negotiating a percentage with the Finance department so as to finally motivate them to release the payment of our already overdue bill.
But what takes the cake and what I find deplorable is when we delay the supply of goods or rendering of a service, the Navy unhesitatingly deducts LD (Liquidated Damages).
Even when we explain that delayed payments from the same Navy entity; have resulted to delay in procuring items for new orders - our pleas and explanations fall on deaf ears. LD is cut - no exceptions. However when payment is delayed - it is the bad luck of the supplier - nobody apologies or sympathises !
We conduct Type Specific ECDIS Training at our Moloobhoy institute. Have you ever heard of delay in the payment of school fees? Yet here in the marine industry it definitely happens !!
We now have come up with the solution to mitigate the delay in payment of tuition fees by ensuring that unless full fees are paid we will not issue the final certificate. We feel ashamed adopting such arm twisting tactics, but the truth is that in our marine industry - it is the norm to not give importance to the payment of suppliers and the smaller and less powerful the supplier is - the worse it is for him.
I dream of an industry which respects its suppliers and service providers as an integral part of the Marine Industry.
Just a short note before I conclude - everything we do at Moloobhoys - we do with pride and passion. We consider every activity that we execute; be it Electronics Servicing, EPIRB / SART Servicing, Lifeboat Servicing, Liferaft Servicing, Fire Fighting Services or SRT or ECDIS Training - as something important, crucial and immensely significant to the Ship and it's safe sailing. We just wish, customers would appreciate that and reward us with timely payment and perhaps with a line or two of appreciation on our service reports.
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