Advantages and disadvantages of managing own ships by a third party ship management company: an empirical investigation

Abstract

This paper examined the maritime institution of ‘third party ship management’ (TPSM). This appeared for the first time in 1970s. In 2008, 2,302 ships were managed under this. The research over this subject is limited. The paper compared this institution with the traditional of managing own ships. Research carried out with five fully answered questionnaires managing up to 1,547 ships and 29 million dwt. TPSM flourished at the time when ownership and management have been separated; Greece being an exception. The real competitive advantage we found for TPSM companies is the recruitment and the education of crew provided at crew supply at the ‘international maritime centres’. At a secondary degree TPSM companies ‘sell’ also technical services. Ship-owners managing own ships maintain cost control in house fully aware of its importance along with in-house chartering. Despite what one may think, TPSM resorted to Antigua and Barbuda flag by majority. Ship-owners giving their ships to TPSM come from developed countries. Comparative efficiency is also examined.