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Q1.In what ways do environment-related shipping policies affect the following components of the maritime industry?
a. New building and scrapping
b. Liner conferences and alliances
c. Shipping companies' profitability.
Provide examples to illustrate your answer.
Q2.Three Companies A, B, and C are providing liner shipping services. What effect will each of the following have on the demand for liner shipping services? For each effect, provide a brief explanation and justification.
a. Company B increases the frequency of services in a shipping route connecting to a particular port that is also serviced by Company A.
b. An interstate highway connected to a port, serviced by Companies B and C, is completed.
c. The economy experiences a moderate upturn, trade increases, and business confidence is improving. But Company A's image is tarnished as a result of a recent strike in one route where both Company B and C also provide shipping service
Q3.Identify and discuss the market structure and key economic issues related to the global dry bulk trades of iron ore, coal and grain.
Q4.Refrigerated cargoes are being carried by both container vessels and specialised reefer vessels. Compare and contrast the likely future growth in refrigerated cargo in both types of vessels. Include examples and economic justification for your views.
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In what ways do environment-related shipping policies affect the following components of the maritime industry?
a) Newbuilding and scrapping: Scrapping refers to the act of breaking down a ship into parts for disposal or reuse by reprocessing them. Newbuilding, as the name suggests, refers to the construction of new ships using parts from the scrapping. Shipping policies aimed at reducing the negative impact on the environment will initially result in an increased amount of newbuilding and scrapping. The environmental impact can be reduced following these policies through an improved hull design achieved by breaking down old ships to build new ones with better technologies (Hayman, Dogliani, Kvale, & Fet, 2000). A better, newer hull design can reduce environmental impact by reducing: operational emissions (through reduced fuel consumption) and accidental pollution (through reduced oil spills and exposure to other harmful materials during an accident). Also, an improvement in the quality of design, structure, outer coatings and working conditions for workers and passengers would require scrapping and increase new building which would finally lead to longevity of the ships and reduced scrapping in the future.
An example: New ship scrapping policy in China has enabled faster demolition of the older vessels in order to build more efficient new ones. The transport ministry has announced a subsidy to shipping companies, to be given in two parts (once after the scrapping and once after building the new vessel). This would reduce pollution from old, single-hull ships and increase the efficiency of the vessels (Liang, 2013)…
a) Company B increases the frequency of services in a shipping route connecting to a particular port that is also serviced by Company A?
Liner shipping is a way of transporting goods with the help of high-capacity ships that move along given routes from different ports, following a fixed schedule. Then, as Company B increases its frequency of services in its schedule, the demand for its service will increase as customers are going to have more options under liner shipping services for a given span of time. They would tend to opt for this service over any other mode of goods transportation. The demand for Company A's service might decrease if B starts giving more frequent services. Company A will face increased competition from B and this will lead to a competitive pricing structure in order to attract more demand. Overall, the demand for liner shipping services will increase in that area…
Identify and discuss the market structure and key economic issues related to the global dry bulk trades of iron ore, coal, and grain?
Dry bulk commodities are those which are shipped in huge amounts in an unpackaged state. These commodities can be divided into two main groups; major dry bulk and minor dry bulk. Iron ore, coal, and grain are some of the most important and dominant dry bulk goods and minor dry bulk goods include cement, sugar and steel (Investopedia, 2015).
Developing and developed economies from all over the world have been growing throughout the last few decades, and a very important feature owing to this growth is the dry shipping market. International trade is globalization wouldn't be possible without the support of dry bulk shipping. Iron ore is the largest constituent of the dry bulk trade, which is followed by coal and grain. The demand for iron ore has seen a constant growth due to the increased demand for steel manufacturing in China and Japan. Coal (both thermal and cooking) is also in high demand for being a chief energy source and an input in the production of steel. While Asian countries are large consumers of iron ore, Japan is a large consumer of coal. Major countries that export dry bulk commodities include Australia, Brazil, South Africa, North America and Indonesia (RESEARCH AND MARKETS, 2014). The rising world population is a major reason for the increased demand of grains. Thus, taking together the rising urbanization, improving steel industry, industrialization in numerous economies and economic development has facilitated the rising demand for iron, coal and grain and hence the global dry bulk market…
Refrigerated cargoes are being carried by both container vessels and specialized reefer vessels. Compare and contrast the likely future growth in refrigerated cargo in both types of vessels. Include examples and economic justification for your views:
Refrigerated cargoes are those cargoes whose temperature and other storage conditions require to be, controlled during transportation and contain goods that are perishable.
They include both frozen (meat, fish) and chilled (fruits, vegetables) goods (Miller, 2006). These products are supplied to the world every day for daily consumption.
The main difference between a container vessel and a specialized reefer vessel is that the letter lasts longer. Reefers transport cargos that are already pre-set to the correct temperature needed for carrying. Energy efficiency of specialized reefer vessels is on the rise as manufacturers have targeted to invest more on them. Reefer vessels offer fresh air ventilation, humidity control and specialized services like controlled atmosphere, controlled air quality, chemical treatments, monitoring cargo conditions. In the future, reefer vessels are expected to provide individual cargo carrying conditions along with cold store (Maersk Line, 2010).