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An Economic Approach to Maritime Risk Management and Safety Regulation

Author

Listed:
  • Kevin X Li

    (Department of Shipping & Transport Logistics, the Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong)

  • Kevin Cullinane

    (School of Marine Science & Technology, University of Newcastle, UK.)

Abstract

Following a description of the fundamental concepts and terms applicable in maritime risk management (MRM), the various methods by which shipowners might reduce their maritime liability risk are analysed. The advantages and disadvantages of each of the methods are addressed and examples of their potential use are provided. Based upon the premise of rational decision-making, an economic explanation for MRM is deduced from first principles and a distinction is drawn between the choice context of individual shipowners and that of maritime regulatory authorities. By integrating these two contexts, a conceptual approach to the application of cost–benefit analysis in maritime safety regulation is derived. The paper concludes by advocating the adoption of such an approach as a means of ensuring that safety regulation sets optimum targets such that the level of compliance yields maximum economic benefit and that the MRM which shipowners implement is effective in satisfying the regulatory targets that are set. Maritime Economics & Logistics (2003) 5, 268–284. doi:10.1057/palgrave.mel.9100078

Suggested Citation

  • Kevin X Li & Kevin Cullinane, 2003. "An Economic Approach to Maritime Risk Management and Safety Regulation," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(3), pages 268-284, September.
    • Handle: RePEc:pal:marecl:v:5:y:2003:i:3:p:268-284
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    Cited by:

    1. Chen, Hong & Lam, Jasmine Siu Lee & Liu, Nan, 2018. "Strategic investment in enhancing port–hinterland container transportation network resilience: A network game theory approach," Transportation Research Part B: Methodological, Elsevier, vol. 111(C), pages 83-112.
    2. Cullinane, Kevin, 2004. "1. Editorial: Key Themes In Shipping Economics Research," Research in Transportation Economics, Elsevier, vol. 12(1), pages 1-17, January.
    3. Fan, Lixian & Luo, Meifeng & Yin, Jinbo, 2014. "Flag choice and Port State Control inspections—Empirical evidence using a simultaneous model," Transport Policy, Elsevier, vol. 35(C), pages 350-357.

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