Although there was a slight improvement in the overall pass rate, it was noticeable that a high proportion of candidates failed to prepare adequately for this examination presenting poor, unstructured answers and which fell well short of the acceptable standard required.
During the 2005 examination, only a small number of candidates attempted fewer than five questions, although some candidates attempted six or more which, bearing in mind only the first five answers will be assessed, wasted valuable time.
Candidates should be aware that brief answers cannot impart enough information for the examiner to assess whether the writer has adequate knowledge of the subject and should also remember that, where applicable, both parts of the question must be answered.
QUESTION 1 – FACTORS INFLUENCING PORT DEVELOPMENT
This question was answered relatively well with a wide variety of ports chosen as examples. While most candidates explained the historical, economic and commercial aspects of their nominated port, very few addressed issues such as availability and cost of labour, value added ancillary services provided by shore based companies or current prevailing political factors which could affect the port’s future commercial viability.
Very few candidates provided sketch maps to illustrate port location, layout or proximity to other ports.
QUESTION 2 – ETHICAL STANDARDS IN THE SHIPBROKING
PROFFESSION
Many candidates attempting this question produced very good answers in which the general concept of ethical behaviour in commerce was conveyed well. While some candidates seemed to grasp the concept of the importance of ethical behaviour in business, others found it difficult to explain the ways in which this type of behaviour could be encouraged, promoted and enforced and very few gave specific examples of unethical practices such as documentary fraud, insurance fraud, etc.
QUESTION 3 – COMPARISON OF CIF/DES TERMS WITH FAS/FOB FROM THE EXPORTER’S VIEWPOINT
While, generally, this question was answered well, many candidates failed to recognise the potential advantages available to an exporter controlling the transport operation when trading under CIF or DES terms.
Many of those attempting this question had a sound understanding of the maritime INCOTERMS, but, disturbingly; some candidates could not explain what the abbreviations CIF, DES, FAS or FOB stood for.
QUESTION 4 – BUSINESS LETTER TO A SHIPOWNER SEEKING APPOINTMENT AS PORT AGENTS.
In order to answer this question correctly, the candidate must understand that the answer should be constructed in the appropriate layout and style of a business letter, which, sadly, many failed to do.
Many of those attempting this question were able to provide a good understanding of the relationship between an agent and a potential principal as well explaining, in a logical manner, the relevant responsibilities of a port agent, although only a small number made reference to special agreements with local suppliers regarding discount for goods and services which could be passed onto the owner.
In many cases, candidates merely listed the tasks which agents would be expected to perform without any reasonable explanation and some drafted only a short introductory paragraph and suggested that the potential principal access the company website for further information.
While many mentioned quality, few went on to say that they had attained ISO 9001 : 2000 accreditation and hardly any mentioned that their “highly qualifies staff” were Members or Fellows of The Institute of Chartered Shipbrokers or other professional organisation.
Only two papers referred to UNCTAD’s recommended minimum standards for Port Agents
QUESTION 5 – MAIN OBJECTIVES OF THE BALTIC AND INTERNATIONAL MARITIME COUNCIL
Most candidates attempting this question were aware of the activities of the Baltic and International Maritime Council and the historical background of the organisation although few were able to explain, in satisfactory terms, the composition of membership.
This question was seeking the candidate to convey core knowledge of this important shipping organisation and to expand by commenting on specific instances whereby BIMCO have had direct influence on behalf of it’s members, such as BIMCO’s involvement in the European anti-drug smuggling scheme, the Sea Carriers Initiative agreement etc.
QUESTION 6 – PAYMENT METHODS IN INTERNATIONAL TRADE
Generally, this question was answered well; with most candidates able explain the main methods of payment and credit facilities available to those involved in international trade.
Diagrams were used by many to illustrate the stages in a payment by Documentary Letter of Credit and these were often used to compliment the sound knowledge they were able to convey in the main body of the essay.
Unfortunately, there were numerous answers which failed to tackle the second part of the question addressing the circumstances under which each method might be appropriate and, therefore, losing these candidates valuable marks
QUESTION 7 – THE FUNCTION OF THE BILL OF LADING AND REASONS FOR ‘ORDER’ BILLS OF LADING.
This question was attempted by most candidates and, in some instances, excellent answers were produced.
Most candidates were able to communicate their understanding of the Bill of Lading well and were able to demonstrate their ability to explain the various clauses which may be applicable in certain circumstances.
Again, when attempting the second part of this question, most conveyed a sound knowledge of the requirements of the international banking system for security in Letter of Credit transactions and were able to illustrate the progress of an ‘order’ B/L from signing through to surrender.
QUESTION 8 – INSURABLE INTEREST
Surprisingly, this question was attempted by very few candidates, although those who did tackle this question appeared to be generally well informed on the main applications of this principle.
While most were able to provide discussion on the various aspects of insurance, few took into account the commercial aspects of those involved in marine insurance such as underwriters. In addition, many failed to embark upon explanation of the insurable interests of parties such as the cargo owner, the shipowner, the charterer or indeed the agent.
Similarly, only a few candidates were able to explain additional factors relating to this topic such as defeasable interest or contingent interest along with contractual and third party liabilities.
CONCLUSION
While it is pleasing to report that there was a slight improvement in the overall pass rate compared to 2004, it is suggested that students can obtain better marks if they read the question properly and address the pertinent issues in a well thought out and logical manner.
In spite of some evidence of better preparation for this examination, candidates are all too often addressing only the first element of a question and are failing to attempt the second or subsequent parts, thus depriving themselves of the opportunity to gain vital marks.
