The main reason why shipowners’ flag out their ship is, directly or indirectly, to save operation cost, in which crew cost is one of the most important items. The number of ROC flagged vessels has been gradually declining ever since 1993 while the number of the FOC (Flag of Convenience) registry vessel has doubled. In this study, in addition to formal cost analysis and questionnaires, we conducted interviews with eight ROC domestic shipping companies (including both liners and tramper companies) and conclude that ROC shipowner can save up to 48.91 in crew cost by registering the vessel under FOC and employing FOC crew instead of registering the vessel under ROC, while under the present regulation, the shipowner would employ a mix of ROC and FOC crews. The study shows that the country of registry greatly affects the operation cost of the ship. The shipowners in Taiwan may be able to refer to this study in evaluation of their operating strategy or in discussion with related government departments.
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