IDEAS home Printed from https://ideas.repec.org/p/ems/eureir/19442.html
   My bibliography  Save this paper

Estimated Incident Cost Savings in Shipping Due to Inspections

Author

Listed:
  • Knapp, S.
  • Bijwaard, G.E.
  • Heij, C.

Abstract

The effectiveness of safety inspections has been analysed from various angles, but until now, relatively little attention has been given to translate risk reduction into incident cost savings. This paper quantifies estimated cost savings based on port state control inspections and industry vetting inspections. It is based on a unique dataset of 515,194 ship arrivals and inspections from the United States of America and Australia, and inspections of three industry vetting inspection regimes, for the time period 2002 to 2007. The risk reducing effect of inspections is estimated by means of duration models, in terms of inspection gains based on the probability of survival. The results suggest average total estimated cost savings in the range of USD 74 to 192 thousand (median USD 19 to 46 thousand) owing to reduced risk of total loss due to a port state control inspection. Cost savings for industry inspections are found to be even higher, especially for tankers. The savings vary by type, age and size of the ship. The benefits of an inspection are in general larger for older and larger vessels, and also for vessels with undefined flags and unknown classification societies. As inspection costs are relatively low in comparison to potential cost savings, the results underline the importance in determining high risk ships to prevent costs due to total loss of ships.

Suggested Citation

  • Knapp, S. & Bijwaard, G.E. & Heij, C., 2010. "Estimated Incident Cost Savings in Shipping Due to Inspections," Econometric Institute Research Papers EI 2010-28, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    • Handle: RePEc:ems:eureir:19442
    as

    Download full text from publisher

    File URL: https://repub.eur.nl/pub/19442/EI2010-28.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bijwaard, Govert E. & Knapp, Sabine, 2009. "Analysis of ship life cycles--The impact of economic cycles and ship inspections," Marine Policy, Elsevier, vol. 33(2), pages 350-369, March.
    2. Knapp, Sabine & Franses, Philip Hans, 2007. "Econometric analysis on the effect of port state control inspections on the probability of casualty: Can targeting of substandard ships for inspections be improved?," Marine Policy, Elsevier, vol. 31(4), pages 550-563, July.
    3. Payoyo, Peter Bautista, 1994. "Implementation of international conventions through port state control: an assessment," Marine Policy, Elsevier, vol. 18(5), pages 379-392, September.
    4. Wayne K Talley, 2002. "Vessel Damage Cost Differentials: Bulk, Container and Tanker Accidents," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 4(4), pages 307-322, December.
    5. McClelland, Gary H & Schulze, William D & Coursey, Don L, 1993. "Insurance for Low-Probability Hazards: A Bimodal Response to Unlikely Events," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 95-116, August.
    6. Wakker, Peter P & Thaler, Richard H & Tversky, Amos, 1997. "Probabilistic Insurance," Journal of Risk and Uncertainty, Springer, vol. 15(1), pages 7-28, October.
    7. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460, Elsevier.
    8. Cariou, Pierre & Mejia Jr., Maximo Q. & Wolff, Francois-Charles, 2008. "On the effectiveness of port state control inspections," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 44(3), pages 491-503, May.
    9. Sabine Knapp & Philip Hans Franses, 2009. "Comprehensive Review of the Maritime Safety Regimes: Present Status and Recommendations for Improvements," Transport Reviews, Taylor & Francis Journals, vol. 30(2), pages 241-270, April.
    10. Sabine Knapp & Philip Hans Franses, 2007. "A global view on port state control: econometric analysis of the differences across port state control regimes," Maritime Policy & Management, Taylor & Francis Journals, vol. 34(5), pages 453-482, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Heij, C. & Bijwaard, G.E. & Knapp, S., 2010. "Ship Inspection Strategies: Effects on Maritime Safety and Environmental Protection," Econometric Institute Research Papers EI 2010-33, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. Heij, C. & Knapp, S., 2011. "Risk evaluation methods at individual ship and company level," Econometric Institute Research Papers EI2011-23, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Heij, C. & Bijwaard, G.E. & Knapp, S., 2010. "Ship Inspection Strategies: Effects on Maritime Safety and Environmental Protection," Econometric Institute Research Papers EI 2010-33, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    2. Yang, Zhisen & Yang, Zaili & Teixeira, Angelo Palos, 2020. "Comparative analysis of the impact of new inspection regime on port state control inspection," Transport Policy, Elsevier, vol. 92(C), pages 65-80.
    3. Esma Gül Emecen Kara, 2016. "Risk Assessment in the Istanbul Strait Using Black Sea MOU Port State Control Inspections," Sustainability, MDPI, vol. 8(4), pages 1-17, April.
    4. Xiao, Yi & Qi, Guanqiu & Jin, Mengjie & Yuen, Kum Fai & Chen, Zhuo & Li, Kevin X., 2021. "Efficiency of Port State Control inspection regimes: A comparative study," Transport Policy, Elsevier, vol. 106(C), pages 165-172.
    5. Yang, Zhisen & Yang, Zaili & Yin, Jingbo, 2018. "Realising advanced risk-based port state control inspection using data-driven Bayesian networks," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 38-56.
    6. Wang, Shuaian & Yan, Ran & Qu, Xiaobo, 2019. "Development of a non-parametric classifier: Effective identification, algorithm, and applications in port state control for maritime transportation," Transportation Research Part B: Methodological, Elsevier, vol. 128(C), pages 129-157.
    7. Jose Manuel Prieto & Victor Amor & Ignacio Turias & David Almorza & Francisco Piniella, 2021. "Evaluation of Paris MoU Maritime Inspections Using a STATIS Approach," Mathematics, MDPI, vol. 9(17), pages 1-13, August.
    8. 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.
    9. Xiao, Yi & Wang, Grace & Ge, Ying-En & Xu, Qinyi & Li, Kevin X., 2021. "Game model for a new inspection regime of port state control under different reward and punishment conditions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    10. Graziano, Armando & Mejia, Maximo Q. & Schröder-Hinrichs, Jens-Uwe, 2018. "Achievements and challenges on the implementation of the European Directive on Port State Control," Transport Policy, Elsevier, vol. 72(C), pages 97-108.
    11. Wang, Yuhong & Zhang, Fan & Yang, Zhisen & Yang, Zaili, 2021. "Incorporation of deficiency data into the analysis of the dependency and interdependency among the risk factors influencing port state control inspection," Reliability Engineering and System Safety, Elsevier, vol. 206(C).
    12. Heij, C. & Knapp, S., 2011. "Risk evaluation methods at individual ship and company level," Econometric Institute Research Papers EI2011-23, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    13. Cariou, Pierre & Wolff, Francois-Charles, 2015. "Identifying substandard vessels through Port State Control inspections: A new methodology for Concentrated Inspection Campaigns," Marine Policy, Elsevier, vol. 60(C), pages 27-39.
    14. Yang, Zaili & Ng, Adolf K.Y. & Wang, Jin, 2014. "A new risk quantification approach in port facility security assessment," Transportation Research Part A: Policy and Practice, Elsevier, vol. 59(C), pages 72-90.
    15. Heij, C. & Knapp, S., 2014. "Effects of wind strength and wave height on ship incident risk: regional trends and seasonality," Econometric Institute Research Papers EI2014-15, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    16. Perepelkin, M. & Knapp, S. & Perepelkin, G. & de Pooter, M.D., 2009. "A method to measure flag performance for the shipping industry," Econometric Institute Research Papers EI 2009-04, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.
    17. Knapp, S. & van de Velden, M., 2010. "Visualization of Ship Risk Profiles for the Shipping Industry," ERIM Report Series Research in Management ERS-2010-013-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    18. Andreas Richter & Jörg Schiller & Harris Schlesinger, 2014. "Behavioral insurance: Theory and experiments," Journal of Risk and Uncertainty, Springer, vol. 48(2), pages 85-96, April.
    19. Horst Zank, 2007. "On the Paradigm of Loss Aversion," Economics Discussion Paper Series 0710, Economics, The University of Manchester.
    20. Liangxia Zhong & Jiaxin Wu & Yiqing Wen & Bingjie Yang & Manel Grifoll & Yunping Hu & Pengjun Zheng, 2023. "Analysis of Factors Affecting the Effectiveness of Oil Spill Clean-Up: A Bayesian Network Approach," Sustainability, MDPI, vol. 15(6), pages 1-19, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ems:eureir:19442. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RePub (email available below). General contact details of provider: https://edirc.repec.org/data/feeurnl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.