Monday, August 11, 2008

Agent, Agency and commission fee

Agent
A person or a company authorized to act on behalf of his or its principal. The appointed agent is very important as he will be the man on the spot who has to act promptly and cautiously to deal with any problems on behalf of his principal. The agent is duty bound to follow the instructions of his principal very carefully and, in many instances, he indicates on whose authority he is acting. It is also common to find under the signature ‘As Agent(s) Only’ to signify in what capacity he is signing. There are many classes of representation involving agents, some of which are: Chartering Agent/Broker, Commission Agent, Distributing Agent, Forwarding Agent, Loading Agent, Operating Agent, Owner’s Agent, Managing Owner, Master for the Owner, Ship Agents and others.

Agency
The right given by an individual or a body to another person or company to act on his or its behalf or to market or sell his or its products. An agency may be classified in three categories;
(1) Specific or Special Agency where the duties are restricted to a nominated transaction.
(2) General Agency where actions can be undertaken on behalf of the principals with a certain amount of responsibility.
(3) Universal Agency which involves the full power of attorney provided all actions will be within law.
Agency appointments are normally given on the basis of a certain period of time or indefinitely by means of a written contract or a letter of intent.
There is a wide scope in agency work such as;
(a) Representing a shipping company
(b) Contracting agreements for the booking (or stemming) of ships for dry-docking and/or repairing in the marine engineering, dry-docking field
(c) Personal representation of official matters in the absence of the principal
(d) Importation of materials and/or products

Agency fee
A remuneration allowed to an agent in a port by a shipowner for work performed during loading and/or discharging operation or any other agency work performed during the time that the vessel has entered and left the port. The agency fees vary in every port and official tariffs are invariably laid down by either the government or other authorities. There is also a very similar agency fee where the importer is allowed a certain percentage against the amount of the imported merchandise by the exporter or the manufactured or his principal. This is termed as “Commission Agency or Agency Fee”.

Commission Agent
An Agent whose method of work is to obtain orders on behalf of various clients and then consign them directly to the individuals concerned. The agent obtains his commission on a percentage against the net cost of the order.

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