Modeling selection of third party ship management services

Abstract Selection of third party ship management (TPSM) in the shipping industry is a complex decision making problem influenced by various factors, which are sometimes contrary in nature. These factors are interrelated and analysing them often requires knowledge, skills and competence from multiple persons. Although multiple attribute decision making methods such as the analytic hierarchy process (AHP) have been widely applied to tackle service selection in many areas, the feasibility studies of using them in TPSM indeed remain scary showing a significant research gap to be filled. This paper aims to develop a TPSM selection model based on AHP, in which major selection criteria are identified through surveying as well as use the developed modeling in a real TPSM selection case of the Bibby Line shipping company. In the case study, the criteria include price, reputation, location, experience, technical expertise and relationship. Data was collected through a combination of relevant literature and interviews with some domain experts/professionals from shipping and ship management companies. The research findings indicate that experience and reputation are the most important criteria for shipping companies when considering the use of the third party services. Also, the developed model as a transparent decision making tool can effectively facilitate ship owners’ selection of the TPSM services as well as their benchmark with respect to each criterion identified. The model and tool are demonstrated in a real TPSM selection case of the Bibby Line shipping company. Consequently, the results were in agreement with the current model used at Bibby's operations, while it proves to be more straightforward and visible for decision makers. Furthermore, this study also shows the advantages and disadvantages of the selected TPSM compared to the other competitors with respect to different criteria, which provides TPSMs with clear benchmarks to improve their services to meet their customers’ need.

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