shipping risk

CONTI Uses @RISK for Shipping Success

CONTI-Group has been a leader in the shipping industry since 1970, operating a large, deep-sea fleet in Germany as well as being an established global provider of ship investment funds.  With commercial shipping being one of the most economical and ecological modes of transport for cargo, tangible shipping assets, including tankers and carrier vessels, represent an important form of financial investment.

After the financial crisis of 2007-2008, the European Union introduced new requirements for better regulation and supervision of the financial sector.  These objectives aimed to introduce a new level of protection for investors by regulating and supervising all markets, and included the provision of quality and transparency in all capital market investments.

CONTI-Group was already unique in its reputation for financial transparency, but when these regulatory requirements for visibility were introduced, CONTI began using Palisade’s @RISK to construct financial models that capture and assess potential risks in the fluctuating shipping market.  This has enabled the company to provide higher levels of transparency to its investors, successfully steer its shipping fleet, and subsequently generate above-average results on its investments.

“We wanted to find a risk management solution that would comply with the requirements of the new regulations, while  also providing us with an even better way of tracking and managing financial risks,” explained Martin Stobinski, Managing Director for Risk Management, Compliance and Asset Valuation for CONTI KVG.

» Read the full case study
» Learn more about @RISK

Shipping Industry Relies on PrecisionTree, @RISK, to Manage Risks to Crew, Environment, and Property

DNV GL SEShipping Industry Relies on PrecisionTree, @RISK, to Manage Risks to Crew, Environment, and Property, an international organization for ship classification, safety and quality control, uses PrecisionTree and @RISK software (part of the DecisionTools Suite, Palisade’s complete toolkit of risk and decision analysis tools) to determine the risk of an incident occurring to a ship or its systems and the consequences should one occur. This enables cost-benefit analysis so that informed decisions can be made about the best strategies to mitigate risk events.

DNV GL is the world’s largest ship and offshore classification organization, and in this context, DNV GL is a key player in major research and development projects for the shipping industry. A core element of their focus is enhancing safety and security in shipping by pro-active use of risk assessment and cost-benefit techniques.

Part of their risk assessment method involves Palisade’s decision tree software, PrecisionTree, to develop the risk models that apply to: (1) crew; (2) environment; and (3) property.

They then use @RISK to perform Monte Carlo simulation, which factors in the uncertainty of input parameters for the risk models, and illustrates the impact on the estimates provided for the assessment of a current level of risk, as well as the cost-efficiency of risk-mitigating measures.

“PrecisionTree makes it straightforward to quickly develop event trees. These are essential to our analysis when looking at how to reduce the both the number of shipping incidents and the consequences should they occur,” explains Dr. Rainer Hamann, Topic Manager Risk Assessment, Safety Research at DNV GL SE. “At the same time we have to be realistic about the accuracy of our data inputs and, by means of distributions and Monte Carlo simulation, @RISK enables us to be clear about the level of uncertainty contained in each model. Embedded in the Microsoft environment, it also allows us to incorporate standard Excel features, making it easy to use.”

Read the original case study here.