Paper Title Analysis of Corporate Risk Factors for liner shipping companies
Liner shipping industry plays an important role in world trade and is highly susceptible to many risk factors such as fluctuating oil price, uncertain ocean freight rate, changing in interest rate, depreciation and appreciation of currency, politics instability, economic downturn and unexpected accident risk. The purpose of this thesis is to discuss the degree of importance of potential risk factors encountered by liner shipping companies. Firstly, risk factors are classified into four major criteria and twelve risk sub-criteria by reviewing extant literatures. These four major risk criteria are operational risk, financial risk, strategic risk and accident risk. Secondly, questionnaire survey was conducted for the Analytic Hierarchy Process and the surveys’ responses could let us realize the degree of importance of various risk factors for liner shipping companies and explore the possible strategies to control the potential risk. The result shows that the ranking of degree of importance of the four criteria are operational risk, financial risk, strategic risk and lastly the accident risk. The ranking of the top three sub-criteria are supply of tonnage risk, interest rate and human resources risk. To prevent risks and reduce losses, most of companies would choose to buy insurance or various derivative financial instruments.
Keywords - Liner shipping company, Risk management, AHP