Outsourcing in Shipping Industry: Rationale and Advantages

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Outsourcing in Shipping IndustryPage 2 Outsourcing in Shipping Industry Rationale & Advantages Contents Introduction 4 Taxonomy of Outsourcing Activities In Shipping Companies 5 Rationale of Selecting Outsourcing 7 Crew Shortage 7 Inflationary Costs and Fuel Consumption 7 Regulatory Compliance 8 Key Selection Criteria for Ship Management Companies 9 Size 10 Financial Security 11 Reputation 11 Global Competence 11 Management Services Offered By the Managers to the Owners 12 Crew Management 12 Technical Management 14 Commercial Management 15 Accounting 16 Managers' and Owners' Obligations to Each Other 18 Other Responsibilities & Liabilities 21 Evaluation of the Manger's Performance 24 Conclusion 25 References 26 Introduction Development of ship management business is one of the most important evolutions that shipping industry has shown. In today's robust world, where various mechanism of simplifying business has been devised, shipping industry hasn't stayed behind. This domain of out-sourcing has evolved from the in-house responsibilities of the ship owners. With vast global operations and increasing costs of maintaining the vessels and human resource attached to it, the need for formal organizations arise which specialize in vessel management and activities related to it. Most important of these responsibilities include crewing, maintenance, supply and compliance with statutory matters. The very concept of outsourcing to ship
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