Ocean Transportation Part One. Marketing Logistics.
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Transcript of Ocean Transportation Part One. Marketing Logistics.
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Ocean Transportation
Part One.Marketing Logistics
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Ocean Transportation
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Ocean Transportation
Type of Ocean Ships
Liners Tramps
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Ocean Transportation
Type of Ocean Ships
Liners Tramps
Somewhat likeLTL motor carriers
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Ocean Transportation
Type of Ocean Ships
Liners Tramps
Somewhat like truckload motorcarriers.
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Ocean Transportation
• Liners
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Ocean Transportation
• Liners– Set schedules.
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Port
Southbound from Florida Northbound to Florida
Departure Arrival Days Departure Arrival Days
ANGUILLA Friday Wednesday 5 Wednesday Monday 5
ANTIGUA Wednesday Monday 5 Monday Monday 7
BARBADOS Thursday Tuesday 5 Tuesday Tuesday 7
CAYMAN ISLANDS
Tuesday** Thursday 2 Thursday Monday 4
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Ocean Transportation
• Liners– Set schedules.
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Ocean Transportation
• Liners– Set schedules.– Published tariffs.
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Ocean Transportation
• Liners– Set schedules.– Published tariffs.– Container or break-bulk.
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http://www.msc.navy.mil/inventory/ships.asp?ship=americantern&type=ContainerShip
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From: http://www.scheepvaarthoek.nl/
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Ocean Transportation
• Liners– Set schedules.– Published tariffs.– Container or break-bulk.
• Lighter-aboard-ship.
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http://www.mdf.ru/english/exhibitions/moscow/northernsearoute70/
Russian nuclear-powered lighter-aboard-ship
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Ocean Transportation
• Liners– Set schedules.– Published tariffs.– Container or break-bulk.
• Lighter-aboard-ship.
• Roll-on/Roll-off ship (RORO)
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http://www.ship-world.de/photo-archive/roro.htm
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http://home.t-online.de/home/shipflag.de/6.htm
http://home.t-online.de/home/shipflag.de/137.htm
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Non-Vessel-Operating Common Carrier (NVOCC)
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
Containership
CA B
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
Containership
C AB
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
Containership
C A B
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
Containership
CA B
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.
Containership
CA B
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Non-Vessel-Operating Common Carrier (NVOCC)
• Consolidator.• Handles all details of exporter’s
shipping needs.• Assumes all obligations of
common carrier.Containership
CA
B
• Often serve freight forwarders (who are
shipper’s agents, not carriers).
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Go to Part Two.
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“Ocean Transportation”
Part TwoMarketing Logistics
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Ship’s Brokers
• Liason between shippers and tramp ships.
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Ship Agents
• Liason between shippers and tramp ships.• Act for ship operator to execute
– Ship arrival.– Clearance.– Loading, unloading.– Fee payments in port.– Used when amount of business in port does
not justify ship owner having their own people there.
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Shipping Conferences
• Voluntary cartel of ship operators who agree on rates.
• Exempt from antitrust concerns.
• Previously carried quality image.
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International Air
• Space and weight capacities on aircraft are at a premium.
• Products less than 10.4 pounds per cubic foot are assumed, for purposes of weight calculation, to be 10.4 pounds.
• Products more than 10.4 pounds per cubic foot are rated at actual weight.
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International Air
• General cargo rate.
• Class rate – for cargo grouped into classes.
• Commodity rate.
• Container rate.
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Container Traffic
• 26% of world container movements in 2003 were intra-Asia.
• China is the fastest-growing market.
• 25% of the container ship fleet is post-panamax.
TDC Trade.com http://www.tdctrade.com/shippers/vol26_4/vol26_4_seafreight05.htm
Lloyd’s Register http://www.lr.org/market_sector/marine/ulcs.htm
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Liner Rates
• Liner costs are 80-90% fixed.– Fixed costs of owning/operating large vessels.– High management overhead for required
sales efforts.
• Ship operating costs: 60-70% of costs are for fuel.
• Ship scrapping.– 95% of ship can be recycled – especially
steel.
BIMCO http://www.bimco.dk/Corporate%20Area/Seascapes/Sea%20View%20/The%20business%20of%20ship%20recycling.aspx
http://www.wipro.com/insights/marinebunkering.htm
Coyle, Bardi, Novack (2000) Transportation
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Liner Rates
• Ships tend to be built for specific routes.– Size.
• Panamax.• Post-panamax.
– Dimensions.– Ports.– Cargoes.
• Rates tend to be based upon costs per cubic foot of space.– Floor price must cover fixed costs.– Prices are then based upon commodity values.
• The higher the landed cost, the higher the transportation charge that can be charged.
– Elasticities are factored in.
Coyle, Bardi, Novack (2000) Transportation
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Tramp Ship Cost Factors
• Tramp ships must be flexible to carry varied cargoes.– Tradeoff: more flexibility, less economy.
Coyle, Bardi, Novack (2000) Transportation
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Tramp Ship Rate-Making
• High fixed costs.• Key is to minimize nonrevenue time and
mileage.• Three types of tramp ship charters.
– Voyage charter: specific trip(s).– Time charter: ship, crew used for a specific
time.– Bareboat: vessel is rented for a long period of
time and charterer provides crew.
Coyle, Bardi, Novack (2000) Transportation
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Ship Size and Economies of Scale
• Ship size previously had been limited by– Abilities of ship builders.– Materials from which to build ships.– Ability of world’s ports to handle.
• By 1970s ports were basically the only limitation.
http://www.bimco.dk/Corporate%20Area/Seascapes/Maritime%20Matters/Scale%20economies%20and%20giant%20ships.aspx
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Ship Size and Economies of Scale
http://www.maersk.com/historyTemplate.asp?nav=1&subnav=12&id=45&decade=&count=31
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Ship Size and Economies of Scale
• Ship size previously had been limited by– Abilities of ship builders.– Materials from which to build ships.– Ability of world’s ports to handle.
• By 1970s ports were basically the only limitation.
• Economies of scale.– Quadruple ship size, only double its building
and operating costs.http://www.bimco.dk/Corporate%20Area/Seascapes/Maritime%20Matters/Scale%20economies%20and%20giant%20ships.aspx
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End of Program