Probabilistic Cost-benefit Analysis for Service Life extension of ships

Service life extension through proactive maintenance has become increasingly important for ships due to significant cost associated with new ship acquisition and adequate remaining load-carrying capacity. While continuous operation beyond design service life can offer economic profits to ship owners, it may also incur significant costs associated with maintenance and operation as well as higher failure risk. Additionally, decisions for life extension can be complicated by the uncertainties associated with structural performance under deteriorating stressors such as corrosion and fatigue. Therefore, service life extension of ships should be planned in a cost-effective and reliable manner. This paper proposes a risk-informed framework that determines the optimal end-of-life strategies for ships (service life extension or ship decommissioning and replacement). A cost-benefit analysis is integrated into the framework to account for deteriorating ship performance, life-cycle risk, loss of service, maintenance costs, and net operating profits. The proposed framework is applied to two categories of oil tankers to highlight the effect of ship size on the cost-effectiveness and net benefit of different end-of-life strategies. A sensitivity analysis is conducted to identify the critical factors in the decision-making process