AN AHP MODEL FOR THE CHOICE OF SHIP FLAG: A CASE STUDY OF TAIWANESE SHIPOWNERS

Abstract

The choice of an appropriate ship flag for the existing fleet or new-building ships is one of important issues of shipowners. The main purpose of this paper is to construct an Analytic Hierarchy Process (AHP) model for the choice of ship flag. An application of the proposed AHP model to the case study on the ship flag choice of Taiwanese shipowners is shown in this article. The results show that the most important influential factors on the ship flag choice of Taiwanese shipowners are in order of the importance as follows: (a) crew cost, (b) incentive, (c) fiscal reason, (d) dual class expense, (e) tax-related expense, (f) PSC inspection, (g) freedom to employ foreign crew, (h) priority to transport, (i) ship registry process, (j) market consideration, (k) level of bureaucracy, and (l) law restrictions. The top four nations for Flag of Convenience (FOC) registry are in order of shipowner’s preferences as follows: (a) Panama, (b) Liberia, (c) Hong Kong, and (d) Singapore. The above findings can be a reference for the maritime departments of Taiwanese government transportation to help the maritime departments offer response strategies and policies for future development of national ship registration system.