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Business models and processes

⇒ Maritime processes

⇒ Unmanned ships

⇒ Port processes

⇒ Shipping KPI Standard and Benchmarks

⇒ Managing Operational Performance - MOPS

⇒ Performance Based Contracting (PbC)

⇒ References

This section of the MiTS pages describes work in the area of maritime business models and processes with emphasis in technology and standards that have the potential to influence or radically change these.

History of shipping

Shipping has a very long history, even if we look at what can be called "modern" shipping. The figure shows some of the mile stones from the first "modern" laws of the sea, via establishment of class societies and more up to date legislation (load lines), radio communication standard through IEC and the World Radiocommunication Conference (WRC), establishment of SOLAS and later IMO and so on.

The long time span has given the parties ample time to perfect relationships between them in light of the technical and operational constrains that apply to the business, e.g., communication constraints, the international nature of the business, open competition and so on. However, one can argue that recent technological advances such as high capacity communication links, AIS (Automatic Identification System - also via satellite) and LRIT (Long Range Identification and Tracking) has changed technical constraints more rapidly than relationships has evolved. This is also one of the issues that will be addressed in this section.

Maritime processes

How the maritime business works is a critical question when trying to improve processes or interactions between parties. Many models exists, but here we show one from the Flagship project. This was based on a model developed during the Norwegian research program "Maritime IT Operations" ("Maritim IT Drift" in Norwegian)from 1994 to 1997.

Flagship processes

The Flagship project had a separate sub-project on improvements in technical operations and management. One result of that was a report outlining at a relatively high level existing and possible to-be processes for different shipping segments (Flagship, 2009). These were the cruise, ferry, tanker and container markets. The report and the process models are available as an on-line resource.

Unmanned ships

The MUNIN project develops and studies a concept for an unmanned dry bulk carrier. Part of the methodology is to develop scenario descriptions in UML for use in risk analysis as well as communication requirements analysis. The draft scenarios are available from this page.

Port processes

The Efforts project developed a standard model for port processes that is described in (Froese J., Zuesongdham P. 2011). It divided port processes into five domains: Marine; Infrastructure; Logistics; Interfaces; and Public. The document will also detail a number of other elements in the port processes.

The Norwegian MIS (Maritime Information Center) project also published a report on port processes and cooperation models (Slettbak L., Fjørtoft K. Tjora Å., Hagaseth M. 2011). This report is much more detailed and is also more focused on the role of ICT-systems in port cooperative processes.

Shipping KPI Standard and Benchmarks

The Shipping KPI standard was developed through two Norwegian Research Council projects in the period 2006 to 2011. MARINTEK was the research partner in the project.

The standard defines 33 KPIs made up of 64 individual performance indicators (PI) that have a standardized and agreed upon definition and interpretation. Ship owners or managers can register PIs for their ships and extract KPIs for individual or groups of ships and compare these with benchmarks from either the full collection or a selected set of ships. The selection criteria are defined to avoid that individual owners or ships can be identified for other than those that operate that ship or fleet.

Managing Operational Performance - MOPS

The MOPS project investigates how the set of Shipping KPIs together with benchmark values from the IMKE database can be used to measure and improve internal ship management processes. Some information about the project can be found at MARINTEK project pages

Shipping KPI was mostly developing a bottom up KPI model that is not directly mapped to any specific processes, but rather to overall performance parameters for ship and organization. Thus, the challenge in MOPS is to see how one can use these KPIs and benchmarks to improve specific processes in the organization.

MOPS has also published a report on the lessons learned from implementing the Shipping KPI regime among the project partners (Nesheim D.A. 2013). This reports is available in the resources section.

Performance Based Contracting (PbC)

Current contract regimes in the shipping industry is only rarely utilizing performance based contracting. An MBA thesis has examined two different successful cases using PbC in some detail as well as given some background to the theory and practical applications. A shorter report has been made on the thesis subject and has been included in the resources section by permission from the author (Hollebrands, J. 2011) .

The EU FP7 project Flagship did an investigation into new and improved ways to perform shipping operations with the help of information technology. One of the issues that was investigated in the project (in sub-project A1) was to see how a system like the Shipping KPI standard could be used to implement performance based contracts. The idea here is that a standard set of performance measurements and corresponding benchmarks gives a neutral and more extensive basis for performance measurement and PbC. One deliverable was produced to document how this could be done and implemented (Norbeck A., Nesheim D.A., Rialland A., Rødseth Ø.J., 2011). This is also available from the resources section.


Flagship, (2009). Technical operations and technical management, Final report, Deliverable D-A1.4.2, Final revision March 2nd 2009

Hollebrands, J. (2011). Performance-based contracting: a new tool in ship management?, Report based on thesis for the MBA degree in Shipping and Logistics, Middlesex University 2011.

Norbeck A., Nesheim D.A., Rialland A., Rødseth Ø.J., (2011). Demonstration of KPIs used in performance based contracts, Flagship Deliverable D-A1.5, 31st May 2011

Nesheim D.A. (2013). MOPS WP1 Implementation of Shipping KPI Reporting Regime, MARINTEK Unrestricted Report, PNO 28016610, 2014-01-27

Froese J., Zuesongdham P. (2011). Port Process Map, Efforts deliverable D3.1.3, 2011-04-26

Slettbak L., Fjørtoft K. Tjora Å., Hagaseth M. (2011). MIS Processes and Cooperation Description, MIS Delivery B, 2011-05-03

Last updated 2014-07-14 by Ø.J.Rødseth @ MARINTEK