Marine Transportation Management

Henry S. Marcus

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351803274
• Edition: 1
• Topic: Commerce
• Subtopic: Commerce Général

Changing vessel technology presents a major challenge to shipping management. Vessels cost tens of millions of dollars and have a long physical life. A change in vessel design for a company may also require a change in port facilities, information systems, and marketing techniques. This book, first published in 1987, deals with many of the vessel technology issues that shipping companies have confronted in recent years. Specific technologies are described along with their economic, regulatory and political aspects. Each chapter is in the form of a case study based on an actual management situation where management had to deal with an aspect of changing vessel technology.

Chapter 1
Introduction

The past two decades have seen dramatic changes in vessel technology. The first tanker of 150,000 deadweight tons (DWT) was launched in 1966. The same year, the first fully cellular containership service started in international trade using converted World War II vessels. Now ultra-large crude carriers (ULCC) over 550,000 DWT exist. Huge containerships, roll-on/roll-off vessels, and barge-carrying vessels are now commonplace.

Changing vessel technology presents a major challenge to shipping management. Vessels cost tens of millions of dollars and have a physical life of more than 20 years. A change in vessel design for a company may also require a change in port facilities, information systems, and marketing techniques.

Shipping managers must carefully evaluate new technologies. They must be ready to adapt to change in order to be competitive, but they must be careful not to choose a technology that cannot be successfully implemented in their market environment.

The next 14 chapters deal with many of the vessel technology issues that shipping companies have confronted in recent years. Specific technologies are described along with their economic, regulatory, and political aspects. The rest of this chapter is devoted to providing the reader with an overview of the shipping industry, as well as the format of the book.

Industry Background

The desire for maritime transportation services is a derived demand. That is, shipping results from a requirement to move goods, whether computers or crude oil. Consequently, demand for shipping is affected by all the factors that influence international trade, such as: economic booms or busts, wars, droughts, canal closures (e.g., Suez), and embargoes. The cyclicality of the shipping market is reflected in Exhibit 1.1, which shows nine major world shipbuilding market cycles over the last century. As can be seen, the length of a cycle is typically much shorter than the life of a vessel; however, the timing and length of the next cycle is always impossible to predict.

Exhibit 1.2 describes the size of the principal merchant fleets of the world. Vessels in the world merchant fleet generally operate in either the liner or the bulk trade. The liner trade is characterized by small customer shipments of manufactured or semi-manufactured goods. The carriers typically form conferences that set freight rates. Within an effective conference, the shipping lines compete on the basis of service quality (e.g., speed, reliability, schedule) rather than price. Vessels stop at several ports on a round-trip voyage in order to try to obtain a reasonable amount of cargo in both directions. Liner firms are common carriers that publish their schedules and their tariffs.

In contrast, the bulk trades are characterized by private or contract carriers. Prices are set by supply/demand considerations and fluctuate considerably. The tanker market is often cited as a textbook example of perfect competition. Bulk carriers typically operate full between an origin and destination port, then run empty until they reach the next loading port. In order to understand the composition of each segment of the world fleet, ...