The Maritime Economics ComponentsAn Overview of Maritime Market

Associate Professor PhD POPA CATALINMircea cel Batran Naval Academy

Maritime Economics

That side of economics science in charge

with maritime transport activities reasearch

and study, in order to provide useful working

tools of in this specific area of knowledge.

Economic enterprises that carry on naval transportation activities, implying in the

demand and supply market game, aiming toget profit from an efficient

resource blending in terms of economic capability

Naval Transportion

economic activities

MARITIME ECONOMICS DEFINITION

TRANSPORT IMPORTANCE IN ECONOMIC CIRCUIT

MANUFACTURING ENTERPRISES

FOREIGN TRADE COMPANIESTRADE COMPANIES

TRANSPORT COMPANIES

LOGISTICS ENTERPRISESRETAIL CONSUMPTION

PROCUREMENT CHAIN

Maritime transports advantages:→ the cheapest meaning of transport;

→ less pollutant;→ biggest quantities;

→ developed in free area of international seas;→ proper standardization.

From pull to push logistics

Transport integration in supply chain

MODULE I

MARITIME TRANPORTATION COMPONENTS

Maritime Economics components

→ Ships – as the meaning of transport

→ Freight cargo (goods) – as the transport object

→ Ports – as the operating location

→ Maritime Actors – as transport subjects

→ Legal framework – the transportation rules and contracts

Ships – naval transportation meanings

Ships technical features:

→ flotability,

→ maneuvering and self navigation,

→ safety of people and goods,

→ propelling systems,

→ operation capabilities.

Economic framework of operating performance:

→ Speed, weather conditions;

→ Ship consumptions;

→ Time restriction;

→ Quantity restrictions;

→ Logistic matters;

→ Port activity performance.

Ships – naval transportation meanings

Ships – naval transportation meanings

THE FREIGHT CARGO THE OBJECT OF MARITIME TRANSPORTS

The cargo importance consists in its:→ quantity;→ quality;→ fluence;

→ frequency;→ ciclycity of demand.

Types of navigation:

→ Tramp navigation;→ Liner navigation;→ Cruise line.

PORT ACTIVITIESa. SHIPS SERVICES:

shipbuilding yards,

ship repairing and maintanance serrvices;

ship bunkers brokerage;

operation services: towage, pilotage, quayage, utilities.

b. GOODS SERVICES: freight operation on loading/unloading procedures;

containership services;

packing procedures;

storage or other goods services.

ADDED-VALUE SERVICES: custom services, insurance, brokerage,

goods manufacturing.

MAJOR PORT FUNCTIONS

→ LOADING AND UNLOADING CENTERS;

→ TRADE/ECONOMIC/FINANCIAL FUNCTIONS;

→ FREIGHT SERVICES ADDED VALUE CENTERS;

→ LOGISTIC CENTER ON HINTERLAND;

→ SOCIAL, PUBLIC, ECOLOGIC FUNCTIONS.

PORT ACTIVITIES

Port Community:

→ Public institutions and port authorities,

→ Port and naval operators,

→ Enterprises in hinterland;

→ Stakehorders (as investors, brokers, agents or insurance houses).

Major Types of Ports:

→ Service ports - managed and operated by public institutions;

→ Tool ports – private operators but managed by public authorities;

→ Landlord ports – public-private port;

→ Private ports – is satisfied the private interest.

The influencing factors in port activity

Influencing factors

Freight demand in region

Socio-economic development Port development

Port geo-position

“Private Service Ports”

“Tool Ports”

“Landlord Ports”

“Service Ports”

Main actors implied in shipping industry

SHIP-OWNERS – Shipping companies ;

CHARTERERS/ EXPORTERS – the transport clients;

BROKERS – for freight, ships, assurance, services;

AGENTS – for services, operation, ship chandlers;

PUBLIC INSTITUTIONS: authorities, stock exchangeinstitutions;

MARITIME MARKET: freight, ships selling, wrecking.

SHIPPING COMPANIES MANAGEMENT- the managerial components -

Contract management;

Freight (market) management;

Operational management;

Technical management – maintanance, repairing;

Financial & economic management;

Legal management;

Human resources – internal or by crewing.

SHIPPING COMPANIES TYPOLOGY

Tramp companies;

Liner companies;

Cruiseline companies;

Wide specialized maritime companies;

Specialized maritime transporters;

Ultraspecialized maritime transporters;

Holding companies: ”one ship-one company”;

Branch naval companies within corporations.

LEGAL FRAMEWORK

International conventions or agreements as :

SOLAS, STCW, LL, MLC, ISM, ISPS.

Contract agreements – major contracts in maritime transport:

→ Voyage Charter”;

→ „Contract Of Afreightment”;

→ „Time Charter”;

→ „Bare boat charter”.

MODULE II

MARITIME MARKET COMPONENTS AND EVOLUTIONS

Maritime market components→ Freight rates market;

→ Ship building market;

→ Second-hand ship trade market;

→ Wrecking market;

→ Port services market;

→ Seagoing labor market;

→ Added value services (for goods and ships).

Price mechanism on maritime market

Factors that influencing the maritime trade

DEMAND

Global economyMaritime trade

Transport route rate

Ocassionally shocks

Maritime transport cost

SUPPLY

Global Fleet

Fleet productivity

New ship buiding

Wrecking industry

Freight rates market

The maritime market structure

Ship trade market

cash

cash

CHARTERERS

Freight market

SHIP YARDS BUILDING

Owners Cut wreck business

Shipbuilding market

Wrecking industry

Business environment

cash

cash

CashTransport

New ships

Nave vechi

Ship deployments

EconomyBusiness cycles in maritime industry

The economic growth determine

maritime trade increasing

Maritime trade

Oil Oil products Coal Containers Iron, steel Grains

Transported quantity/ distance (tons/miles)

Factors întâmplători Goods ownersdecision

Costs transportului

DEMAND

FREIGHT MARKET - SUPPLY/DEMAND MECHANISM

Ship-owners decisions

Ship trade market

Fleet productivity

Global fleet

New ships input, ship cuts output

Operation costs are increasing by ship age

Ship building

Added values

Financing policies

Supervision and legal

framework

Trade balance

SUPPLY

MODULE III

MARITIME MARKET EVOLUTIONS

- Statistic overview -

International maritime market issues

→ International seaborne trade;

→ Fleet evolution – structure, volume;

→ Freight market & maritime costs;

→ Ports evolution and development;

→ Regulatory and legal frameworks;

→ Sustainable shipping future development.

International seaborne trade Maritime transport is the backbone of international

trade and a key engine driving globalization.

Around 80% of global trade by volume and over 70% by value is carried by sea and is handled by ports worldwide;

These shares are even higher in the case of most developing countries.

Synthesis – main statistical ideeas

world seaborne trade grew by 4 % in 2011, taking the total volume of goods loaded up to 8,7 billion tons;

world fleet continuue to expand recording an increase of 37% in last four years, reaching 1,5 billion dwt;

freight rates in 2011 and 2012 continuue to be on lowlevels, unprofitable for ship owners;

Container throughput get an increase of 5.9% touchingthe level of 528 millions TEU.

World economic overview

While growth in developed economies weakened in 2011, developingcountries continued to drive world economic expansion and to

account increasingly for a larger share of world GDP.

WORLD SEABORNE TRADE

Preliminary data indicate that world seaborne trade grew by 4% , based on dry cargo volumes increasing up to 5,6% (containers and najor bulk trades up to 8,6%)

International seaborne trade by cargo type

World seaborne trade in period of 1999-2012

World seaborne trade in period of 1999-2012

World seaborne trade in period of 1999-2012

Global container trade in period of 1999-2012

World fleet structure by vessel types

New container ships deliveries

World fleet age evolution

Global share of foreign-flagged fleet

Foreign and national ownership of top 30 fleets

World tonnage new orders

Freight rates statistics – container shipping

Freight rates statistics – daily tanker time charter

Freight rates statistics – BDI evolution

Cost of maritime transport by components

Top 20 port operator in containers

Seagoing labor marketThe evolution of seafarers demand embarked under EU flag in 2011

Seagoing labor marketThe evolution of seafarers by region in 2012

Seagoing labor market perspectives

Thank you for your patience andgood understanding!