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Microeconomics Of Maritime Shipping Essay

2269 words - 9 pages

Introduction
Much of our modern day information about the Maritime economy has been primarily based on the historical happenings in the global economy. As world become ever more globalized and interlinked, maritime shipping is experiencing challenges as well as enjoying greater business opportunities. Maritime shipping is mainly the primary means of transporting parts and the finished goods around the world. Because shipping is such an old industry, with a history of continuous change, sometimes gradual and occasionally catastrophe, Time and again we find that shipping and trade will slipway from the economy and then magical reappear in some new voyages no other industry has played such a central part in the economic voyages over thousands of years. The airline industry is shipping’s closest counterpart and it has barely 60 years of economic history. It plays a fundamental role in the economic development and trade of countries. In essence, economic development, trade and transport are mutually supportive. Ocean liner shipping is a regularly scheduled service on established ocean routes between countries or areas. Liners carry primarily manufactured goods that are relatively high in value. Although liners account for less than 53% of all freight, they amount for more than 93% of U.S. freight. (http://www.wto.org) A striking feature of the shipping business to outsiders is the different character of the companies in different parts of the industry. Liner companies and bulk shipping companies belong to the same industry, but they seem to have little else in common. There are several different groups of companies involved in the transport chain, some directly and others indirectly. The direct players are the cargo owners, often the primary producers such as oil companies or iron ore mines and the shipping companies. Each has a slightly different perspective on the business. In 2004, 5518 shipping companies owned the 36,903 ships carrying the world’s deep-sea trade, an average of seven ships per company. There are some very big companies, at least when measured by the number of ships owned, and one-third of the fleet was owned by 112 companies with over 50 ships. Amongst the biggest companies are the national shipping companies such as APM-Maersk Company with 566 ships owned and chartered, Mediterranean Shg Co with 189 owned ships and also chartering 290, many of which are privately owned companies, and the remainder was owned by 4690 companies with an average of 2.3 ships each. (http://www.alphaliner.com/top100/)
Literature Review
Liner shipping networks are developed to meet the growing demand in global supply chains in terms of frequency, direct accessibility and transit times. Expansion of traffic has to be covered either by increasing the number of strings operated, or by vessel upsizing, or both. As such, increased cargo availability has triggered changes in vessel size, liner service schedules and in the structure of liner shipping. When...

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