1) Q: What is MARCAS?
A: MARCAS is an association of shipping companies, which has the purpose of aggregating purchasing volume to obtain maximum value for goods and services. Maximum value is determined by a combination of price, quality, service, and assured supply and delivery. With a global presence MARCAS is as a highly reputable and dependable contracting association which provides access to commodities and services volume agreements with over 130 suppliers.
With more than 1700 member vessels, MARCAS has a significant purchasing volume, and continually benchmarks its prices to ensure that its members obtain the best value for money. MARCAS’ objective is to aggregate volume, negotiate globally on behalf of its members with selected suppliers in order to obtain the most competitive prices in the market, whilst not compromising on quality or safety. MARCAS makes its income from a brokerage fee levied on suppliers.
MARCAS has an extensive contract coverage network from reputable market leading suppliers providing competitive prices for shipping consumables including lubricants, chemicals, gases, welding, refrigeration, paints (seastock and dry dock coatings), communication, crew travel, chandlery, weather routing and charts, drug and alcohol testing, fuel analysis and spare parts.
2) Q: What is the aim of MARCAS?
A: The aim of MARCAS is to be the world’s leading independent contracting association for the shipping industry.
MARCAS business model is:
- Aggregating volume to set up best possible contracts
- Aim to create a win-win-win scenario for the clients, the supplier and MARCAS – (i) Market leading discounts and net prices for clients; (ii) Aggregated quality volume for suppliers; (iii) Brokerage fees earned by MARCAS
- “If you have 4 ships or 40 ships, you can get a price negotiated on the back of the volume of hundreds of ships”
3) Q: What benefits are there to shipping companies by joining MARCAS?
A: The combined buying power of the membership enables MARCAS to establish worldwide supply contracts and market leading discounts and net prices.
Through MARCAS, the members can benefit from:
- Reduced operating costs thanks to purchasing power of over 1700 vessels
- Support for strong corporate governance through central contracting
- MARCAS conducts regular benchmarking and tenders to ensure market leading prices
- Maintaining total control of the procurement function and maintaining direct contact with their suppliers
4) Q: What benefits are there to suppliers by joining MARCAS?
A: Suppliers gain access to MARCAS’ global network of members who collectively operate over 1700 vessels internationally.
MARCAS suppliers can benefit from:
- Access to a very large volume of business through one interface
- Maintaining direct relations with clients to meet their demands
- Account management support
- Support with credit control
5) Q: On average, what percentage saving on prices do MARCAS achieve?
A: The savings achieved completely depend upon the size and individual circumstances of each owner. Savings can be anywhere up to 30%. Irrespective of the actual savings which can be achieved, the underlying principle of ‘existing MARCAS member volume, plus additional volume’ means a better price.
6) Q: What is the ‘best possible’ price?
A: Whilst no one can have the best price, all of the time, everywhere, MARCAS seeks significant competitive advantage and best price due to its volume. This is achievable due to MARCAS’ scale, and whilst there are always exceptions, MARCAS strives to achieve best price where possible by covering a significant number of suppliers and ports according to its members’ needs.
‘Apple for apple’ comparisons must be done carefully – initial fill deals, movement of pricing over time, discounts from which price list, service, quality, payment performance, and lead time on orders must all be taken into account when looking at a headline price.
7) Q: Is MARCAS a profit making organisation?
A: Yes, MARCAS receives brokerage and volume rebate fees from suppliers, which are typically between 1 to 3%. These fund the work done by the MARCAS organisation for its members and suppliers, which includes:
- Running of competitive tendering processes
- Negotiating with suppliers on a regular basis
- Managing on-going relationships with its suppliers and Members
- Constant benchmarking to gauge MARCAS’s contract offerings in the marketplace and ensure that MARCAS obtains, for its Members and their principals, the market leading price, terms and conditions
- Reviewing volumes pledged by Members and determining best supply strategy
- Spotting opportunities to arrange new or updated contracts for the Members
8) Q: How does MARCAS ensure that its prices are market leading?
A: MARCAS monitors the price competitiveness of its contracts on a continuous basis to verify they are in line with market conditions. Regular benchmarking is done and MARCAS also encourages member feedback. Prices can be tailored for specific trading patterns as required.
9) Q: Does payment performance impact pricing or MARCAS earnings?
A: Yes. On pricing, the payment performance impacts the ability to negotiate the best possible price with the supplier. MARCAS earnings are negatively impacted by late payment or non-payment. This is why the ability of owners and members to pay on time is an important part of the equation.
10) Q: What if a member finds products with other suppliers cheaper than MARCAS contracts offer?
A: If any member feels that they have a better offering on an ‘apple for apple’ basis, they should raise this with MARCAS, who will investigate and recommend a solution.
11) Q: What products and services do MARCAS contracts cover, and who are the suppliers?
A: Products and services covered by MARCAS contracts and MARCAS suppliers are listed on the website.
12) Q: Which shipping companies are currently members of MARCAS?
A: MARCAS has 24 shipping company members which are listed on the website.
13) Q: Who can join MARCAS?
A: MARCAS desires its membership to be leading owners, operators and third party managers of vessels who purchase spares and consumables and who add value to the overall association. As such, this is reviewed on a case by case basis.
14) Q: What must a shipping company or supplier commit to when joining MARCAS?
A: By joining MARCAS, members must commit to:
- Adherence to MARCAS business rules
- Confidentiality of prices
Suppliers must commit to:
- Quality product and service
- Competitive prices below general market rates, based on volume discount
15) Q: Do shipping companies need to pay to become a member of MARCAS?
A: V.Ships and Anglo-Eastern managed clients automatically join for free. Other members are required to pay an initial one-off membership fee of USD$10,000.
16) Q: Who can become a MARCAS supplier?
A: MARCAS suppliers must be leading players in their respective product or service areas, operate to recognised quality standards, offer an excellent level of service and competitive prices that are below general market rates, based on volume discount.
17) Q: Who is responsible for negotiations with suppliers and who is responsible for procurement?
A: Members maintain full control of their own procurement management including purchase orders and handling invoices directly. The role of MARCAS is to negotiate the overall framework pricing with the supplier.
18) Q: Does MARCAS contract directly with the suppliers?
A: MARCAS puts a frame agreement in place with the suppliers, but then each and every purchase is a direct contractual relationship between the supplier and the buyer (member or owner).
19) Q: In what form did Anglo-Eastern join MARCAS and what are the implications?
A: Anglo-Eastern joined MARCAS as a new member in April 2014,to form a strategic partnership with V.Ships in MARCAS, to support and utilise the services of the enlarged MARCAS organisation for the benefit of their respective clients. The purpose of the partnership is to advance the business of MARCAS and its benefit to owners, by jointly reviewing and improving supplier agreements. Following Anglo-Eastern’s participation, the estimated buying power of the MARCAS partners is more than $1billion with contracting for close to 1700 vessels which represents significant buying power in the market.