A method to measure enforcement effort in shipping with incomplete information

Abstract

Current methods in the shipping industry to evaluate performance do not account for differences in fleet profiles of registries such as age, size or ship type and not for bad luck. This can lead to unfair evaluation of enforcement efforts of the international standards. Furthermore, incentives to improve performance are concentrated on decreasing detentions rather than incidents. This article proposes a new method to a longstanding problem to evaluate performance that rectifies shortcomings of the method currently used. The proposed method measures the enforcement effort by means of proxy variables and introduces incentives for improvement that go beyond the currently used ‘detention’. The aim is to provide a fair and transparent way. The proposed method is applied and results are compared with methods currently used to demonstrate how the rankings change. The method can be adapted to other areas of the shipping industry such as classification societies or ship management companies.