Market Conditions and Retirement of Physical Capital: Evidence fron Oil Tankers

The endogeneity of capital retirements is studied for the particular case of oil tankers from 1979--1989. A model is estimated to examine the effect of changes in market conditions on the price and scrappage of tankers. Energy price rises had a major impact on the value of ships and on which ships were scrapped. A simple model is able to account for many features of the market. We use the information implicit in second-hand prices to ease the computational burden for the model that is estimated.

Abandoning Ship at Scandia, Inc.: Part A

Scandia, Inc., is a commercial vessel management company located in the New York Metropolitan area and is part of a family of firms including Scandia Technical; International Tankers, Ltd.; Global Tankers, Ltd.; Sun Maritime S.A.;Adger Tankers AS; Leeward Tankers, Inc.; Manhattan Tankers, Ltd.; and Liu’s Tankers, S.A. The company’s current market niche is the commercial management of chemical tankers serving the transatlantic market with a focus on the east and gulf coast of the United States and Northern Europe. This three-part case describes the commercial shipping industry as well as several mishaps that the company and its President, Chris Haas, have had to deal with including withdrawal of financial support by creditors, intercorporate firm conflict, and employee retention. Part A presents an overview of the commercial vessel industry and sets the stage for Parts B and C (to be published in the Spring 2011 issue) where the firm’s operation is discussed

Abandoning Ship at Scandia, Inc.: Parts B and C

Scandia, Inc., is a commercial vessel management company located in the New York Metropolitan area and is part of a family of firms including Scandia Technical; International Tankers, Ltd.; Global Tankers, Ltd.; Sun Maritime S.A.;Adger Tankers AS; Leeward Tankers, Inc.; Manhattan Tankers, Ltd.; and Liu’s Tankers, S.A. The company’s current market niche is the commercial management of chemical tankers serving the transatlantic market with a focus on the east and gulf coast of the United States and Northern Europe. This three-part case describes the commercial shipping industry as well as several mishaps that the company and its President, Chris Haas, have had to deal with including withdrawal of financial support by creditors, intercorporate firm conflict, and employee retention. Part A, which was published in the Fall 2010 issue, presented an overview of the commercial vessel industry and set the stage for Parts B and C where the firm’s operation is discussed

A Complementarity Model for the European Natural Gas Market

In this paper, we present a detailed and comprehensive complementarity model for computing market equilibrium values in the European natural gas system. Market players include producers and their marketing arms which we call "transmitters", pipeline and storage operators, marketers, LNG liquefiers, regasifiers, tankers, and three end-use consumption sectors. The economic behavior of producers, transmitters, pipeline and storage operators, liquefiers and regasifiers is modeled via optimization problems whose Karush-Kuhn-Tucker (KKT) optimality conditions in combination with market-clearing conditions form the complementarity system. The LNG tankers, marketers and consumption sectors are modeled implicitly via appropriate cost functions, aggregate demand curves, and ex-post calculations, respectively. The model is run on several case studies that highlight its capabilities, including a simulation of a disruption of Russian supplies via Ukraine.European natural gas market, global LNG market, mixed complementarity problem

Quirky Constitutional Provisions Matter: The Tonnage Clause, Polar Tankers, and State Taxation of Commerce

In Polar Tankers, Inc. v. City of Valdez, the Supreme Court in 29 struck down a City of Valdez levy that was in form a personal-property tax, but that primarily reached oil tankers using Valdez’s ports, on the ground that the levy violated the Tonnage Clause of the Constitution (“No State, shall, without the consent of Congress, lay any Duty of Tonnage”). The Tonnage Clause, part of the constitutional structure intended to ensure federal primacy in regulating commerce, was once a staple of litigation, but Polar Tankers was the first Supreme Court case decided under the Clause since 1935. Polar Tankers provides the opportunity to revisit a clause that might now seem quirky, but that was unquestionably important in the first century of the Republic, that raises many intriguing interpretive issues, and that can still (as this case shows) have significant effect

The complex network of global cargo ship movements

Transportation networks play a crucial role in human mobility, the exchange of goods, and the spread of invasive species. With 90% of world trade carried by sea, the global network of merchant ships provides one of the most important modes of transportation. Here we use information about the itineraries of 16,363 cargo ships during the year 2007 to construct a network of links between ports. We show that the network has several features which set it apart from other transportation networks. In particular, most ships can be classified in three categories: bulk dry carriers, container ships and oil tankers. These three categories do not only differ in the ships' physical characteristics, but also in their mobility patterns and networks. Container ships follow regularly repeating paths whereas bulk dry carriers and oil tankers move less predictably between ports. The network of all ship movements possesses a heavy-tailed distribution for the connectivity of ports and for the loads transported on the links with systematic differences between ship types. The data analyzed in this paper improve current assumptions based on gravity models of ship movements, an important step towards understanding patterns of global trade and bioinvasion.Comment: 7 figures Accepted for publication by Journal of the Royal Society Interface (2010) For supplementary information, see http://www.icbm.de/~blasius/publications.htm

Potential Terrorist Uses of Highway-Borne Hazardous Materials, MTI Report 09-03

The Department of Homeland Security (DHS) has requested that the Mineta Transportation Institutes National Transportation Security Center of Excellence (MTI NTSCOE) provide any research it has or insights it can provide on the security risks created by the highway transportation of hazardous materials. This request was submitted to MTI/NSTC as a National Transportation Security Center of Excellence. In response, MTI/NTSC reviewed and revised research performed in 2007 and 2008 and assembled a small team of terrorism and emergency-response experts, led by Center Director Brian Michael Jenkins, to report on the risks of terrorists using highway shipments of flammable liquids (e.g., gasoline tankers) to cause casualties anywhere, and ways to reduce those risks. This report has been provided to DHS. The teams first focus was on surface transportation targets, including highway infrastructure, and also public transportation stations. As a full understanding of these materials, and their use against various targets became revealed, the team shifted with urgency to the far more plentiful targets outside of surface transportation where people gather and can be killed or injured. However, the team is concerned to return to the top of the use of these materials against public transit stations and recommends it as a separate subject for urgent research

Maintenance/repair and production-oriented life cycle cost/earning model for ship structural optimisation during conceptual design stage

The aim of this paper is to investigate the effect of the change in structural weight due to optimisation experiments on life cycle cost and earning elements using the life cycle cost/earning model, which was developed for structure optimisation. The relation between structural variables and relevant cost/earning elements are explored and discussed in detail. The developed model is restricted to the relevant life cycle cost and earning elements, namely production cost, periodic maintenance cost, fuel oil cost, operational earning and dismantling earning. Therefore it is important to emphasise here that the cost/earning figure calculated through the developed methodology will not be a full life cycle cost/earning value for a subject vessel, but will be the relevant life cycle cost/earning value. As one of the main focuses of this paper is the maintenance/repair issue, the data was collected from a number of ship operators and was solely used for the purpose of regression analysis. An illustrative example for a chemical tanker is provided to show the applicability of the proposed approac