Ship Management: Enhancing Efficiency and Cost Optimization in the Shipping Industry

Running head: MANAGEMENT RESEARCH
A study on how ship management companies operate effectively in the industry and
optimized the cost involved in this competitive shipping industry
Name of the Student:
Name of the University:
Author note:

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Executive summary
Ship management industry is quite a complex industry. The primary function of the ship
management companies is to manage the entire business as well as manufacturing, maintenance
and repair of the vessels and provide the highest value to the customers. TS Maritime Sdn Bhd is
a reputed ship management company in Malaysia, which aims to improve its business efficiency
and implement cost optimization. This study provides an overview of the factors that affect the
operational and business efficiency of the ship management companies and how the cost
optimization is necessary to increase profitability of the business. The study was conducted in
the context of TS Maritime Sdn Bhd. Qualitative primary data was collected through interview
and along with secondary data, the researcher applied qualitative research method to conduct the
study. It has been found the companies should put the maximum focus on the technological
upgradation to make the systems highly efficient and also implement efficient leadership to
manage the workforce coming from diverse background. Lastly, the companies should adopt one
or more cost optimization processes as per the capital availability and requirement.

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Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................3
1.1 Introduction............................................................................................................................3
1.2 Research problem..................................................................................................................4
1.3 Research aim..........................................................................................................................5
1.4 Research objectives...............................................................................................................5
1.5 Research questions.................................................................................................................5
1.6 Significance of the research...................................................................................................6
1.7 Structure of the paper.............................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................8
2.1 Introduction............................................................................................................................8
2.2 Company overview................................................................................................................8
2.3 Factors of effective operations of ship management.............................................................9
2.4 Cost optimization in ship management................................................................................11
2.5 Leadership in ship management and its effectiveness.........................................................12
2.6 Methods adopted by the ship management company to improvise their operations for
making it safer, smarter and more efficient...............................................................................13
2.7 Strategies adopted by the ship management companies during depression of bulk cargoes
and oil recession period.............................................................................................................14
2.8 Literature gap.......................................................................................................................15

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CHAPTER 3: RESEARCH METHODOLOGY...........................................................................17
3.1 Introduction..........................................................................................................................17
3.2 Research philosophy............................................................................................................17
3.3 Research approach...............................................................................................................18
3.4 Research design...................................................................................................................18
3.5 Data collection method........................................................................................................19
3.6 Sampling technique and sample..........................................................................................20
3.7 Data analysis process...........................................................................................................20
3.8 Ethical consideration...........................................................................................................21
3.9 Time line..............................................................................................................................22
CHAPTER 4: DATA ANALYSIS, FINDINGS AND INTERPRETATIONS.............................23
4.1 Findings and interpretations................................................................................................23
4.1.1 Findings from primary data..........................................................................................23
4.1.2 Secondary data analysis................................................................................................27
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS...................................................35
5.1 Linking with the objectives.................................................................................................35
5.1.1 Linking with first objective..........................................................................................35
5.1.2 Linking with second objective......................................................................................36
5.1.3 Linking with third objective.........................................................................................36
5.1.4 Linking with fourth objective.......................................................................................37

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5.2 Recommendations................................................................................................................37
5.3 Limitations and future scope of study.................................................................................38
References......................................................................................................................................39
Appendix........................................................................................................................................44

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CHAPTER 1: INTRODUCTION
1.1 Introduction
Ship management refers to the process of dealing and managing all the activities and
operations of a ship. Usually the ship management activities are performed by independent
companies that use ships of other companies or other owners. These companies manage the ships
for their owners and pay them the amount of annual agreement between the owners and the
management companies. The ship owners have the right to lease the ship completely or some
services partially to the ship management companies (Weske 2012). It is quite a competitive
industry, with a large number of ship management companies existing.
There are various types of things that are included in the ship management business.
These are carried out over the span of before, during and after the operations. The operations
include approval for the ship, and its type, such as, if it’s a container vessel, or passenger ship,
then getting approvals for other business, supervision and maintenance services, manning the
ship and services for loading and unloading of the cargos (Bulut et al. 2012). Thus, the ship
management operations include variety types of services and it is quite a large industry with a
tough competition.
This research study is meant to explore the operations of the ship management companies
in the Malaysian ship management industry. The research will be conducted to evaluate the
effective functioning of the ship management companies in Malaysia and how the cost
optimization can be achieved in the competitive industry of ship management. The study will
present the research aim, objectives and research questions and that will be followed by an

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extensive literature review to create the context of the study. TS Maritime Sdn Bhd, Malaysia
was considered as the case study company for this study to narrow down the research process.
Information will be gathered from this company to get an in-depth overview of these ship
management companies in Malaysia. The paper will also present a proper research methodology
chosen to conduct the study, followed by data analysis, findings, discussion, and finally,
conclusion and recommendation for the ship management companies of Malaysia.
1.2 Research problem
Ship management is a complex business operation that requires efficient skill
management. This business operation has substantial exposure to financial, commercial, physical
and political risks. It is a volatile industry that faces quite a few challenges, such as, cost, which
is linked to the volatile oil prices and the general market demand, which is dependent on the
general economic state and variations in the international trade. Hence, the business has high
risks and if it is not managed properly, it can face a downfall (Weske 2012).
Various types of national compliances are strictly followed in ship management, such as,
international law, financing legislations, maritime legislation and insurance compliances. The
ship owners face a major challenge of meeting the costs to the finance and for the cargo vessels,
it is all the more challenging due to the rising cost of fuel and market overcapacity, which drives
the vessel charter rates down along with the competition. The ship managers are under big
pressure to provide effective management solutions coupled with cost optimization, while
keeping the management fee unchanged to obtain the contract from the owners. Thus, the ship
managers are responsible for meeting the requirements of the vessels that is, its safety,
efficiency, cost effectiveness and compliances. The cost of maintaining the quality, maintenance,
safety of operations and crew management are rapidly increasing and the companies need to find

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out the ways for effective management of their operations that includes reduction of costs and
also ensuring that the goals are still achievable even with limited resources.
1.3 Research aim
The aim of this research paper is to analyze the process of improvisation adopted by the
ship management companies for successfully managing the vessel without compromising on the
quality, safety, operations and environmental protection along with maintaining cost
effectiveness to stay competitive in the challenging industry.
1.4 Research objectives
The objectives of the research study are:
 To study the improvisation methods adopted by the ship management companies for
delivering smarter, safer and efficient services to retain its position in the competitive
industry
 To provide solutions for efficient cost optimization in ship management companies
 To suggest key success strategies for the ship management companies in Malaysia
 To analyze the efficient methods for achieving the goals of the companies
 To evaluate the impact of the management on the business success of the ship
management company
1.5 Research questions
1) What are methods adopted by the ship management company to improvise their
operations for making it safer, smarter and more efficient?
2) What are the factors that affect the cost optimization of the ship management company
and how to mitigate the impact of those factors and achieve cost optimization?