Risk management in the cruise supply chain : an empirical study in China

The increased frequency and severe consequences of risks in the cruise industry have attracted increasing attention from both academics and practitioners, especially following the 2012 Costa Concordia disaster and the 2020 coronavirus outbreak on the Diamond Princess. The consequence of a risk faced by one or more supply chain players may also affect other players in the chain and directly affect the ability of the cruise supply chain (CSC) to provide high-quality services to passengers. However, the existing literature shows that there has been little research on risk management in the CSC. This research applied the concept of the supply chain to the cruise industry and investigated risk management within the industry from the supply chain perspective. It identified and assessed risks of the CSC and recommended risk treatment strategies. A mixed methods approach was used to collect and analyse data from telephone interviews in the qualitative strand and email questionnaire surveys in the quantitative strand. Twenty-two semi-structured telephone interviews were conducted with participants from CSC players, including cruise lines, cruise port operators, the maritime authority, travel agencies, cruise service providers, port agents and the cruise industry association in Shanghai China. Using the software NVivo 12 and the content analysis method, the qualitative strand of this research defines the concept of the CSC, validates risks identified from the literature review, explores additional CSC risks, and proposes risk treatment strategies. Outcomes from the qualitative phase (identified risks) were used to develop a survey questionnaire instrument to collect data for risk assessment from thirteen key players in the CSC, including cruise lines, cruise port operators, travel agents, cruise service providers, the cruise industry association, and port agents. Using a novel risk assessment model, risks of the CSC were assessed and prioritised. This research first conceptualises the CSC by examining its key entities, processes, activities and characteristics, and therefore provides a deeper understanding of the CSC based on the literature review and interviews. More specifically, these key entities include such as cruise lines, cruise port operators, port agents, travel agencies, and cruise service providers. Processes and activities of the CSC were explained from the view of the distribution service, port service, and onboard and shore service. Four CSC characteristics, demand-driven and supply-driven, globalisation, complexity, and flexibility, were identified from the interviews. In addition, twenty risks were identified in the CSC through a literature review and validated by interviews. A risk typology of the CSC was then developed, including macro risks, safety, security & health risks, information risks, and supply risks. This research developed a novel risk assessment model based on Failure Mode and Effects Analysis (FMEA), Fuzzy Belief Rule-based Bayesian Network (FBRBN), Evidential Reasoning (ER), Degree of Belief (DoB), and Analytic Hierarchy Process (AHP) to assess the identified CSC risks. This model extended the conventional single-level FMEA hierarchical structure of risk parameters to two-level, considered the differences in the trustworthiness of expert opinions and the differential weights of the antecedent attributes, and improved FBRBN calculation efficiency by adopting a divorcing concept. The assessment results suggested that \Communicable diseases\" \"Ship accidents\" \"Injuries\" \"Geopolitical risks\" and \"Climate change and weather issues\" are the most significant risks. The first three risks are in the safety security & health risk category and the latter two risks are in the macro risk category. In the information risk category the most significant risk is \"Information security/breakdown risks\". In the supply risk category \"Insufficient or poor-quality service supply at cruise destinations\" is the most significant risk. Subsequently this research categorised the twenty CSC risk treatment strategies that were examined into control and detection relationship-based strategies marketing strategies policy-based strategies risk transfer and share and flexibility. This research is a starting point for examining the cruise industry from the supply chain perspective. It contributes to the cruise literature by conceptualising the CSC identifying and classifying risks in the CSC proposing a risk assessment model and providing risk treatment strategies for the risks identified in the CSC. In practice this research enables practitioners in the cruise industry to gain a deep understanding of the concept and significant associated risks of the CSC. The recommended risk treatment strategies are of value to practitioners in managing risks within the CSC."