2. The organization of the shipping market

2. The organization of the shipping
Defining the maritime market
Defining demand / customers
Defining the suppliers
Shipping= Παίκτες/agents: Shippers,
shipowners, brokers, shipbuilders, bankers,
Shipping is a way of life, not only business!
An overview below…
Product differentiation In shipping (how a cargo is shipped)
• Price (Demand is relatively price inelastic. As
transport cost only 2.5%, has little or no impact
on the cargo volume transported)
• Speed ($1mil. Inventory cost, with 10% int.rate,
for 3-month period costs $25.000. If 1.5 month
period, it worth paying 12.500 more freight…for
a speeder ship…)
• Reliability (just in time!)
• Security (the cost of loss/damage/piracy)
-------------------------------------------------------------The economic model of sea transport below
Economic model of sea transport
Bulk (liquid/oil/chemicals/wine etc,
Minor/steel/cement/ salt/ wood/ etc)
Liner (loose, containerized, palletized, pre-slung small
items cargo, liquid, refrig., heavy)
Specialized (ships for specific cargo types/vehicles
forest, refrig. Gas, etc))
Differences in
1. Value
2. Volume
3. Number of transactions
4. Commercial systems
Ship size and economies of scale