The role of organisational characteristics of ship owning firms in the use of third party ship management

Ship-Owners' Decisions to Outsource Vessel Management

“…Conversely, owners from Indonesia, Russia and Greece are more likely to manage vessels in-house, with the probability increasing by more than 60 points. Our econometric estimates confirm the findings reported by Panayides and Cullinane (2002), Mitroussi (2003Mitroussi ( , 2004aMitroussi ( , 2004b and Drewry Shipping Consultants (2004). Although outsourcing is significantly different from one country to another, our results also indicate that this is not solely the result of differences in fleet structures, as we controlled for age, size and type of vessels in our regressions.…”

“…This probability decreases as the size of the owner's fleet grows. As indicated by Mitroussi (2004b), various factors may explain this result. Smaller companies may need technical expertise, while medium-sized companies may need a way of benchmarking their own management performance.…”

“…Although many studies about the extent of outsourcing and the choice of third-party ship managers exist (Panayides, 2001;Panayides and Cullinane, 2002;Mitroussi, 2003Mitroussi, , 2004aMitroussi, , 2004b, they have been carried out on a case-tocase basis through surveys, and they often focus on differences in behaviour between Greek and UK ship-owners. Panayides (2001) and Panayides and Cullinane's (2002) surveys of 48 ship management companies and 36 Greek and UK owners showed, for instance, that the primary criterion considered by a ship-owner in the selection of a third-party ship manager is technical ability, followed by the experience and qualifications of personnel, while price is not a decisive criterion.…”

“…These factors are company size, company type (private/ family or public), company age and technological change. In its investigation of the impact of these attributes, Mitroussi's (2004aMitroussi's ( , 2004b survey of 46 Greek and 20 UK ship-owners identified distinct profiles. For instance, while 55% of the UK-based companies use third-party management companies, only 8.3% of Greek companies use the same services.…”

“…Ship-owner's characteristics also have an impact on the choice to outsource (Mitroussi, 2004b). Small and large companies outsource in similar proportions (around 16%).…”