Liner Shipping Economics

Liner Shipping Economics

by Jan Jansson

Paperback(Softcover reprint of the original 1st ed. 1987)

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Overview

Liner Shipping Economics by Jan Jansson

The importance of international liner shipping needs little emphasizing. A large majority of international trade moves by sea, and the liner shipping share in total freight revenue exceeds one-half. Notwithstanding, people in general know surprisingly little about the basic facts of the liner shipping industry, and, in particular, about the economics ofliner shipping. Perhaps because it is an international industry, where shipping lines flying many different flags participate, it has tended to fall in between national accounts of domestic industries. Even transport economists have, generally speaking, treated liner shipping rather 'stepmotherly'; besides the work of Bennathan and Walters (1969), a relatively small group of specialized maritime economists, including A. Stromme-Svendsen, T. Thorburn, S. Sturmey, R. Goss, and B. M. Deakin, have in the post-war period made important contributions to the subject, but so far no coherent and reasonably comprehensive treatise of liner shipping economics has appeared. The first purpose of the present volume is therefore obvious: to provide just that. The book is divided in three parts: Part I The liner shipping industry; Part II Liner service optimization; Part III Economic evaluation of the conference system. Needless to say, all three parts concur to fulfill the first purpose of providing a complete book of liner shipping economics. In Part II a more or less separate, second, purpose has been to develop analytical tools for liner service optimization. Thereby we use different approaches.

Product Details

ISBN-13: 9789401079143
Publisher: Springer Netherlands
Publication date: 10/12/2011
Edition description: Softcover reprint of the original 1st ed. 1987
Pages: 300
Product dimensions: 6.10(w) x 9.25(h) x 0.03(d)

Table of Contents

I The Liner Shipping Industry.- 1 Characteristics of demand and supply of liner shipping.- 1.1 An aggregate picture of seaborne trade and the world fleet tonnage.- 1.2 The development of the shares of the world fleet: developed countries, flags of convenience and developing countries.- 1.3 Liner shipping, shipping for hire and ‘own shipping’.- 1.4 The relative size of the liner shipping industry.- 1.5 Recent development in general cargo shipping.- 1.6 Geographical aspects of liner shipping.- 2 Market organization: the conference system.- 2.1 The scope of the conference system.- 2.2 Conference organization and main activities.- 2.3 Why conferences?.- 2.4 Concluding remarks.- 3 The level and structure of freight rates.- 3.1 The general level of freight rates.- 3.2 The structure of freight rates.- Appendix A: The construction of the CONISCON index (1975–85).- Appendix B: The liner index of the FRG (1976–85).- Appendix C: The construction of an individual line freight rate index.- 4 The art of charging what the traffic can bear.- 4.1 The main form of price discrimination in liner shipping.- 4.2 The role of commodity value for shipping demand elasticity.- 4.3 The role of competition from other sources of goods supply for shipping demand elasticity.- 4.4 Competition from ‘outsiders’ and other modes of transport.- 4.5 Summary and conclusions.- II Liner Service Optimization.- 5 Ship size and shipping costs.- 5.1 Sizes of ships of different categories: The statistical picture.- 5.2 Plant-size economies in general.- 5.3 The three ship capacities.- 5.4 The model.- 5.5 Estimation of ship size elasticities of handling and hauling capacities and factor costs.- 5.6 Economies of size at sea — diseconomies of size in port.- 5.7 Optimal ship size.- 5.8 Analysis of the effect on optimal ship size of parameter changes in the model.- 5.9 The optimal size of a palletized reefer ship: A case study.- 5.10 Towards a model of ship size growth.- 6 Multi-port calling versus trans-shipment.- 6.1 The general problem: Feeder-transport cost minimization in a given service range.- 6.2 The specific problem: The potential of sea-feeder transport.- 6.3 The very large container carriers and feeder services.- 7 Shippers’ costs of sailings infrequency and transit time.- 7.1 Storage costs.- 7.2 Costs of sailings infrequency and transit time for goods which are not stored by importers.- 7.3 Loss of value of perishable goods.- 7.4 How important are shippers’ costs?.- Appendix: Optimal ship size when both shipping company costs and the shippers’ costs are accounted for.- 8 Port costs and charges and the problem of shipping and port sub-optimizations.- 8.1 ‘Public’ general cargo transport systems versus ‘private’ bulk cargo transport systems.- 8.2 Bottlenecks in ports.- 8.3 Port charges as a means of coordinating shipping and port operations.- 9 A cost minimization model of a liner trade.- 9.1 A liner trade model — purpose, scope and assumption.- 9.2 Total producer and user costs.- 9.3 Optimal ship size, multi-port diversion, and frequency of sailings.- 9.4 The minimum total cost per ton.- III Economic Evaluation of the Conference System.- 10 The charging floor reconsidered.- 10.1 Economies of scale?.- 10.2 Common cost and factor indivisibility.- Appendix: Model of profit-maximizing freight rate making.- 11 The freight rate structure is out of line with the marginal cost structure.- 11.1 Principles of marginal cost-based tariffs.- 11.2 Cross-subsidization between commodities.- 11.3 Excessive averaging of freight rates: Some suggestions for reforming the tariff construction.- 11.4 Further aspects of a cost-based freight rate structure.- Appendix: Freight rates and shipping marginal costs of Israeli imports and exports.- 12 Potential cartel profits become social costs.- 12.1 Empirical evidence of low load factors in liner shipping.- 12.2 Model of supply and demand equilibrium in a liner trade.- 12.3 Some evidence of a negative relationship between the load factor and the profit potential.- 12.4 Excessive service competition.- 13 Conclusion: price competition in liner shipping should be encouraged.- 13.1 The two types of ill effects.- 13.2 Allocative inefficiency effects.- 13.3 ‘Slack’ effects.- 13.4 Encourage price competition and service coordination.- 13.5 Recent attempts of reforming liner conference practices.- 13.6 Problems of regulating international liner shipping.- 13.7 Hopes for the future.- References.- Author index.

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