Assessing the cost competitiveness of China’s Shipbuilding Industry

Cost has a significant impact on competitiveness within the shipbuilding industry. In China, low costs have created favourable conditions for domestic shipyards competing in the international market. However, China’s shipbuilders have been facing rising cost pressures in recent years, which may affect their industrial competitiveness. In this article, we assess China’s shipbuilding cost and its impact on the competitiveness of China’s shipbuilding industry. We make comparisons with China’s major competitors, South Korea and Japan, over the period from 2000 to 2009. First, we analyse principal factors that affect shipbuilding cost. Second, we examine the changes in China’s shipbuilding cost over the time period. Finally, we use shipbuilding cost and market share as the basis for analysing the competitiveness of the shipbuilding industry. The results reveal the sources and limiting factors of China’s cost advantage, as well as changes in its shipbuilding cost and competitiveness.Shipbuilding cost; industry competitiveness; China’s shipbuilding industry

Modeling Freight Markets for Coal

In this paper we study bulk shipping of coal between the central regions in the world. We compare the performance of cost-minimizing models with a gravity model approach. The main finding in the paper is that cost minimizing models provide relative poor fits to data. A simple one parameter gravity model, however, provides very satisfactory fits to observed behaviour.Bulk freight; cost efficiency; gravity modeling

Port pricing : principles, structure and models

Price level and price transparency are input to shippers’ choice of supply chain and transport mode. In this paper, we analyse current port pricing structures in the light of the pricing literature and consider opportunities for improvement. We present a detailed overview of pricing criteria, who sets prices and who ultimately foots the bill for port-of-call charges, cargo-handling fees and congestion charges. Current port pricing practice is based on a rather linear structure and fails to incorporate modern pricing tools such as price differentiation or revenue management. Consequently, ports apply neither profit maximising pricing nor pricing designed to exploit available capacity more efficiently

Capacity retirement in the dry bulk market: A vessel based logit model

The paper investigates the effect of vessel specific and market variables on the probability of scrapping dry bulk ships of different sizes. Using a 2012-2015 dataset, we find that, the probability of scrapping increases with age, but that the relation between vessels size and scrapping probability varies across the different segments. That is, the scrapping probability is lower for larger vessels in size segments where there is a trend towards building larger vessels. In addition, while the relation between earnings and probability of scrapping ships is negative, bunker prices seem to only affect the scrapping rate of smaller tonnage

Quality incentives pay-off?

Intermediaries ascertain vessel quality in shipping markets. Thus, the classification societies set minimum quality requirements for trading vessels. Minimum class requirements do not differentiate between high quality and normal quality vessels. This reduces shippers’ willingness to offer higher freight rates for high quality vessels since they cannot identify these vessels. In this paper, we exploit theories on asymmetric information and incentive contracts to induce "flagging" of vessel quality. We analyse how both self-selection and credible signalling of vessel quality may be used to overcome asymmetric information. The object of this paper, is to identify contract requirements that may induce owners to increase vessel quality .We suggest charter contracts that allow shipowners to implicitly signal vessel quality. Shippers may use contracts that induce self-selection by operators in charter markets. Ports also may use pricing strategies to induce self-selection among ship operators

Efficient (re-)scheduling : an auction approach

This paper considers one-sided scheduling problems, where a schedule of service is arranged at one location, without regard to other schedules. Typically, such scheduling problems are handled on a first-come-firstserve basis, which is grossly inefficient. The present paper proposes a scheduling mechanism that is a non-standard auction, in which the allocation is ruled by evaluating combinations of bids. The proposed mechanism implements the efficient allocation in dominant strategies and is deficit-free. Since that mechanism is suitable for the scheduling problems at sea-ports, loading or unloading at sea-ports is used as an illustration

Port Pricing Structures and Ship Efficiency

The paper discusses port pricing structures that enhance ship efficiency. Traditionally, ports use public infrastructure pricing, which does not take differences in waiting cost into considerations. We present two alternatives, a two part priority pricing scheme and port slot auctions, as alternative scheduling and pricing schemes that enhance ship efficiency.

The Shipbroking Function and Market Efficiency

Shipping uses brokers extensively. Shipbrokers typically act as intermediaries matching sellers and buyers of vessels or transport services. This paper analyses the characteristics of shipbrokers' contribution to market efficiency. Shipbrokers mainly contribute by a) speeding up search and matching, b) obtaining favourable ask/bid prices, and c) functioning as experts in deals with asymmetric information. Findings of this paper point out that efficient search and matching are important in spot freight markets. Quality assessments are more important in secondhand and in timecharter markets. Shipowners who opt for an exclusive shipbroker, face higher switching costs. Such binding may bias the freight rate towards the charterer and the secondhand value towards the buyer.International Journal of Maritime Economics (2000) 2, 17–26; doi:10.1057/ijme.2000.1

A discrete-time stochastic partial equilibrium model of the spot freight market

This paper presents a stochastic extension of the classical partial equilibrium models of the spot freight market. The supply in the model is based on microeconomic analysis of the supply characteristics of a given fleet and orderbook, in this case the VLCC fleet, and stochastic demolition and ordering behaviour. Combined with stochastic demand, the model is used to simulate scenarios for the future VLCC spot freight rate

The international coal trade pattern

Climate policies may reduce the coal demand in some of the major coal importing countries (e.g., Western Europe and Japan). This paper analyses how a shift in the import demand for coal will affect the trade pattern in the international coal market. The following issues are covered: a) Is coal a homogenous good in the sense that it is easy for coal importers to switch between suppliers in different countries? b) Is the USA still a swing supplier in the world coal market, as claimed by Ellerman (1995), or are other countries taking over this position? c) How are trade patterns influenced by shipping freight rates? We find that a) importers increasingly blend their own coal composite and thus may switch between suppliers more easily than before, b) USA’s position as swing supplier in the steam coal market has declined and c) a trend toward shorter transport distances prevailed in periods with falling freight rates