An evaluation of operational risks for general cargo ship operators

Abstract

As general cargo ships (GCSs) hold certain advantages over more mainstream shipping services, GCSs have a considerable degree of importance in the shipping market. This paper focuses on the use of risk evaluation procedures to perform empirical analysis of the operational risk faced by GCS operators, which is a subject that has garnered relatively little academic attention. After identifying risk factors, four risk aspects and 16 operational risk factors are determined and used to construct an Analytic Hierarchy Process (AHP)-based risk matrix evaluation model. An expert questionnaire addressing both subjective and objective facets is then used to perform evaluation of the model, enabling conversion of the relative weights to risk scales. Lastly, the determination of each risk factor’s risk areas allows the proposal of risk management strategies. The results indicate that four of the risk factors are in the high risk area; these consisted of the loading stage factor “delays at port of loading,” the laden voyage stage factor “poor stowage and securing,” the laden voyage stage factor “perils of the sea,” and the discharging stage factor “delays at port of discharge.” This paper also proposes risk management strategies on the basis of the experts’ recommendations, and its findings can provide shipowners and charterers with a reference for the drafting of risk clauses when entering into a charter party.