Contents
This paper answers the following questions- - Question 1
- Discuss the statement: ‘Container shipping is a high risk business’. Use industry information to support your answer.
- [10 Marks]
- Question 2
- A director of a shipowning and operating company is considering placing a newbuilding order for a dry bulk vessel Panamax of about 74,000 dwt mainly for the Transpacific trade. The director thinks that Far East is a growing market, so the company should capture the growing business in Transpacific trade.
- a Identify and analyse the relevant economic factors that should be considered in the decision making.
- [10 Marks]
- b Provide and justify recommendations to the director about his ship investment plan.
- [5 Marks]
- See the Essay/report assessment criteria sheet on the following page for information about the criteria and the standards by which your work will be judged.
Description
Container shipping business involves cargo ships carrying all the load in truck-size intermodal containers (Nottebom, 2004). Around 90% of the non-bulk cargo is transported by container across the globe (Millman, 2015). The container ships compete against the crude oil tankers and bulk carriers and are considered as largest commercial vessels in the ocean (Millman, 2015). The Container Shipping Industry has experienced increased imbalance since the economic crises of 2008 (Bowman, 2014). The essay discusses the amount of risk a containership business has in the current market and it also analyses the economic factors, which should be considered by the ship owning company while ordering for a new dry bulk vessel to take advantage of growing business in transpacific trade.
