Part 2 Flashcards
What two things should a successful shipowner focus on?
- The change in world economy and world political conditions
- The changes in the shipping market
What is the starting point in the Shipping Market Supply/Demand Model?
Balance of supply and demand
How are freight rates affected in the Shipping Market Supply/Demand Model?
Imbalance between supply and demand
What can a change in frieght rates prompt?
- Ordering of new ships, scrapping of old ones
- change in the performance of the fleet
What does a change in freight rates determine in terms of supply?
How supply responds to changes in demand
What generates most of the demand for sea transport?
World Economy
List all:
Five Factors affecting the demand
for sea transport
- World Economy
- Seaborne Commodity
- Average Haul
- Transport Costs
- Political Events
List all:
Five Factors affecting the Supply
for sea transport
- World Fleet
- Fleet Productivity
- Ship Building Productivity
- Scrapping and losses
- Freight Rate
What are the three aspects of the world economy that may change the demand for sea transport?
Business cycle, trade elasticity, trade development cycle
What is an important cause of short term volatility in seaborne commodity trades?
Seasonality of some trades
Which agricultural commodities are subject to seasonal variations caused by harvests?
Grain, sugar, citrus fruits
When do grain exports from the US Gulf reach a trough and build up?
Summer, September
During which seasons is more oil shipped in the oil business?
Autumn, early winter
In terms of average haul, What does the demand for sea transport depend upon?
Distance of cargo shipment
How Shippers deal with transport of seasonal agricultural commodities?
Shippers of these commodities rely heavily on the spot charter market to meet their tonnage requirements
As a result, fluctuations in the grain market have more influence on the charter market than some much larger trades such as iron ore where tonnage requirements are largely met through long-term contracts.
Seaborne commodity trades:
What are four types of change to look out for
1- changes in the demand for that particular commodity (or theproduct into which it is manufactured);
2- changes in the source from which supplies of the
commodity are obtained;
3- changes due to a relocation of processing plant which
changes the trade pattern; and
4- finally changes in the shipper’s transport policy
What does the demand for sea transport depend upon?
Distance of cargo shipment
What is the distance effect referred to as in this context?
‘Average haul’ of the trade
How is sea transport demand measured?
How is Average Haul derived?
tonnage of cargo shipped, multiplied by the average distance over which it is transported.
What are examples of events that dramatically illustrate the effect on ship demand of changing the average haul?
Closure of Suez Canal, Closure of Dortyol pipeline
Why has the average haul changed in most trades over the last few decades?
Due to demand and source of supplies changes
Political disturbances
The term, ‘political event’ is used here to refer to
as a localized war, a revolution, the political
nationalization of foreign assets or even strikes
What do many developments in sea trade depend on?
Economics of shipping operation
Why will raw materials be transported from distant sources?
If cost can be reduced or major benefit obtained
