Ship-line combination risk: S.N.A.V. S.P.A. case

The shipping companies’ risk system basically refers to two risk categories: technical risks (shipwreck, grounding, fire, etc.), and economic risks. As to the first category the attempt is made to minimise risks by transferring its effects to third parties (insurance companies), or to other forms of self-insurance creation of specific funds. With respect to the second category, as the risk effects cannot be transferred to third economies, causes are analysed to minimize the effects themselves. The aim of this paper is to verify how cost accounting-based approaches, methods and tools can support the management to understand the causes of the ship-line combination risk. Such a risk leads to higher cost levels than the ones expected by the company and its interpretation does not imply a mere recording of cost variation only, but also an analysis of all tools that make management “aware” of its existence. The aim is to provide sufficient methodological supports (to be further refined) for an “aware” choice in favour of ship-line combinations, analysing their modes of use and, whenever possible, operating on the cost areas. This paper includes a first chapter where the risks system of the line shipping companies is outlined and a second chapter on the ship-line combination risk. In conclusion the case study of S.N.A.V. S.p.A is illustrated that, as result of the first research findings, enables us to have a better understanding of the relationship between risk and cost accounting tools highlighting the points of strength and points of weakness in the knowledge of the causes generating a ship-line combination risk.