ITIC exposes real cost of crew internet access for ship manager

International Transport Intermediaries Club (ITIC) has explained how a ship manager was recently asked to pay $436,000 in communication costs as the result of an error which unwittingly allowed the crew of a ship unrestricted access to the internet over a three-month period.

In the latest issue of its Claims Review, ITIC notes that it was the policy of a particular shipping company to upgrade the communications packages on all its time-chartered and owned vessels from systems which provided email and satellite telephone communications only, to systems that also included limited onboard internet access at fixed monthly rate payments. These new systems were gradually being fitted throughout the fleet.

When the existing communications unit on board one ship (which did not include internet access) failed during the first few months of 2009, it was replaced by a modern broadband unit, but not by the new system. This unit was intended to replace the existing email and voice communications only. But the broadband unit was also capable of internet access via satellite link.

The vessel superintendent employed by the ship manager inadvertently failed to exclude internet access when he completed the activation form. During the installation and activation he also failed to notify the crew of its intended use or advise on any tariff rates, which were in his possession.

The crew, who had already been notified of the company’s intentions regarding future internet access for all its vessels, wrongly assumed that the new unit had been provided for their unlimited use, and proceeded to download at will. The usual cost of communications under the old system was no more than $1,800 per month. Had the intended upgraded system, including limited internet access, been in place, the monthly cost would have been $3,800.

During a three-month period, before the error was discovered, the crew downloaded freely and managed to run up an enormous airtime charge of $436,000. As the shipping company had never agreed to this free-for-all use of the internet by the crew, it claimed from the ship manager the difference between what it would have paid ($5,400) and the actual amount charged.

ITIC is managed by Thomas Miller. More details about the club and the services it offers can be found on ITIC’s website at www.itic-insure.com.

March 2011
ITIC Press Release PR0411