An integrated risk estimation methodology: Ship specific incident type risk

Shipping activity has increased worldwide, including parts of Australia, and maritime administrations are trying to gain a better understanding of total risk exposure in order to mitigate risk. Total risk exposure integrates risk at the individual ship level, risk due to vessel traffic densities, physical environmental criteria, and environmental sensitivities. A comprehensive and robust risk exposure metric can be beneficial to maritime administrations to enhance mitigation of potential harm and reduce vulnerability to the marine environment as well as to safeguard lives and property. This report outlines an integrated methodology to estimate total risk exposure, with specific attention for the ship specific risk for different types of incident. Some related application aspects of the models are discussed

Econometric analysis of ship life cycles - are safety inspections effective?

Due to the shipping industry’s international legal framework and the existence of loopholes in the system, an estimated 5-10 percent of substandard ships exist which are more likely to have incidents with high economic cost. This article uses ship life cycles to provide insight into the effectiveness of inspections on prolonging ship lives. We account for fluctuations in the relevant economic environment and the (possible time-varying) ship particulars. We use a unique dataset containing information on the timing of accidents, inspections, ship particular changes of more than fifty thousand ships over a 29 year time period (1978-2007). The results of our duration analysis reveal that the shipping industry is a relative safe industry but there is a possible over-inspection of vessels. It also reveals the need to improve transparency related to class withdrawals and changes of classification of the vessel. Another interesting finding is that for the majority of ship types an increase in earnings decreases the incident rate. This is in contrast to the industry perception of the impact of earnings. The effect of inspections vary across ship types and the prevention of incidents with high economic costs can be improved by better coordination of inspections, data sharing and a decrease in the number of inspections . Further, more emphasis should be placed on the rectification and follow up of deficiencies

A multi-layered risk exposure assessment approach for the shipping industry

__Abstract__ Shipping activity has increased worldwide and maritime administrations are trying to enhance risk mitigation strategies by using proactive approaches. We present and discuss a conceptual framework to minimize potential harm based on a multi-layered approach which can be implemented in either real time for operational purposes or in prediction mode for medium or longer term strategic planning purposes. We introduce the concept of total risk exposure which integrates risk at the individual ship level with vessel traffic densities and location specific parameters such as weather and oceanographic conditions, geographical features or environmental sensitivities. A comprehensive and robust method to estimate and predict risk exposure can be beneficial to maritime administrations to enhance mitigation strategies and understand uncertainties. We further provide a proof of concept based on 53 million observations of vessel positions and individual risk profiles of 8,900 individual ships. We present examples on how endpoints can be visualized for two integrated risk layers – ship specific risk and vessel traffic densities. We further identify and discuss uncertainties and present our ideas on how other risk layers could be integrated in the future

A multi-layered risk estimation routine for strategic planning and operations for the maritime industry

Maritime regulators and port authorities require the ability to predict risk exposure for strategic planning aspects to optimize asset allocation, mitigate and prevent incidents. This article builds on previous work to develop the strategic planning component and introduces the concept of a multilayered risk estimation framework (MLREF) for strategic planning and operations. The framework accounts for most of the risk factors such as ship specific risk, vessel traffic densities and met ocean conditions and allows the integration of the effect of risk control option and a location specific spatial rate ratio to allow for micro level risk assessments. Both, the macro (eg. covering larger geographic areas or EEZ) and micro level application (eg. passage way, particular route of interest) of MLREF was tested via a pilot study for the Australian region using a comprehensive and unique combination of dataset. The underlying routine towards the development of a strategic planning tool was developed and tested in R. Applications of the layers for the operational part such as an automated alert system and sources of uncertainties for risk assessments in general are described and discussed along with future developments and improvements

Dynamics in the dry bulk market

Recent dynamics in iron ore markets are driven by rapid changes in economic activities that affect commodity markets, trade flows, and shipping activities. Time series models for the relation between these variables in Southeast Asia and the Australasian region are supplemented with models for safety and pollution risk. Steel production in China, Japan, and South Korea is related to iron ore exports and vessel activity in Australia, with an estimated time lag of about two months. The Purchasing Manager Index, which is popular among traders as indicator of economic activity, is found to have predictive power both for steel production and for iron ore exports. The growth in economic activity and vessel movements is associated with significantly higher risks for ship accidents and pollution

Risk evaluation methods at individual ship and company level

Safety management and risk profiling to identify substandard ships are of importance to the shipping industry. Whereas current methods rely heavily on detention risk and flag state performance, we extend the risk assessment by considering various risk dimensions and by evaluating a wide range of risk factors. Apart from detention risk, we consider also the risk of various types of accidents (total loss, very serious, and serious) and damage (hull and machinery, cargo, pollution, loss of life, and third party liabilities). Risk factors include ship particulars like ship type and classes of companies and owners, as well as historical information on past accidents, inspections, and changes of particulars. We present methods to summarize and visualize various risk dimensions and we pay particular attention to the identification of potentially risky companies. The empirical results are obtained by combining rich data sets with information on ship arrivals, inspections, and accidents for the period from 2006 to 2010. The presented methods and results are of interest to various stakeholders in the industry, such as charterers, insurance companies, maritime administrations, and the International Maritime Organization

Improved strategies for the maritime industry to target vessels for inspection and to select inspection priority areas

Inspection authorities such as the Port State Control Memoranda of Understanding use different policies and targeting methods to select vessels for inspections and rely primarily on past inspection outcomes. One of the main goals of inspections is to improve the safety quality of vessels and to reduce the probability of future incidents. This study shows there is room for improvement in targeting vessels for inspections and in determining vessel-specific inspection priority areas (e.g., bridge management versus machinery related items). For the year 2018, sixty percent o

Analysis of the Maritime Inspection Regimes - Are ships over-inspected?

The lack of trust in the maritime industry between all the industry organizations and regulators has created an inspection industry which is heavily controlled by oil majors in order to limit their liability. This report is an introductory part of a PhD project called "The Econometrics of Maritime Safety – Recommendations to Enhance Safety at Sea" which is based on 183,000 port state control inspections1 and 11,700 casualties from various data sources. Its overall objective is to provide recommendations to improve safety at sea. This part identifies all inspections that are performed in the name of safety onboard vessels, their estimated costs and frequencies and brings them in relation with insurance claim costs from P&I Clubs. The probability of casualty is analyzed per frequency of inspection and detention. The results reveal that certain ships are inspected frequently and that over-inspection does not necessarily decrease the probability of having a casualty but can rather increase it

Effect and Improvement Areas for Port State Control Inspections to Decrease the Probability of Casualty

This report is the fourth part of a PhD project called "The Econometrics of Maritime Safety – Recommendations to Enhance Safety at Sea" and is based on 183,000 port state control inspections and 11,700 casualties from various data sources. Its overall objective is to provide recommendations to improve safety at sea. The fourth part looks into measuring the effect of inspections on the probability of casualty on either seriousness or casualty first event to show the differences across the regimes. It further gives a link of casualties that were found during inspections with either the seriousness of casualties and casualty first events which reveals three areas of improvement possibilities to potentially decrease the probability of a casualty – the ISM code, machinery and equipment and ship and cargo operations

Does ratification matter and do major conventions improve safety and decrease pollution in shipping?

We develop a method which measures the effect of the major international conventions in the area of safety, pollution, search and rescue and work related measures. We further distinguish between the effect of entry into force and the status of ratification of a convention by its parties. We use standard econometric models and base our analysis on a unique dataset of 30 years of monthly data where we correct for other factors which can influence safety such as safety inspection