OVERVIEW
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There are over 140,000 ship and 170,000 ship owner
and manager entries in maritime transportation
industry.
Ships are the least regulated mode of transportation.
Ship represents a large capital investment that
translates into a large cost per day.
Port time is expensive and presents diseconomies of
scale (port operations, the optimal size of ship).
Generally, the longer a trade route is, the larger the
share of sea-days in a voyage, and the larger the
optimal ship size will be.
OVERVIEW
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Factors effect the optimal ship size;
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the utilization of ship capacity at sea (the “trade
balance”),
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loading and unloading rates at the ports,
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the various costs associated with the ship.
 A ship is a long-term investment. The useful life of a
ship spans 20–30 years.
 During the life of a ship a lot of market volatility may
be encountered (eg; fluctation in freight rates
 In the short run the owner may
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reduce the daily variable operating cost by slow
steaming (reduction in fuel consumption)
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the owner may lay up the ship till the market
improves.
OVERVIEW
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Lay up a ship significantly reduces its daily
variable operating cost.
 When the market is depressed,owners scrap
older ships.
 The value of a scrapped ship is determined
by the weight of its steel (the “lightweight”
of the ship)
 there is high supply of ships for scrap
 the price paid per ton of scrap drops.
SHIP MANAGEMENT
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Ship management concerns all activities required to
operate the ships effectively, except providing equity
finance.
The Baltic and International Maritime Council
(BIMCO) SHIPMAN contract is often used between
ship owner and manager.
The contract defines the ship management services;
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Crewing management
Technical management
Insurance arrangements for hull and machinery, and
protection and indemnity (P&I) insurance.
Commercial management
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Other services
SHIP MANAGEMENT
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The operational expenses are used to keep the
ship in operation and vary per ship.
Manning is the largest component of
operational expenses OPEX. Expenses for ship
finance and voyage operations are not OPEX.
The ship manager is paid for its services with
the annual management fee (roughly 5% of
annual operational expenses).
The ship owner is obliged to indemnify the
ship manager against any third-party claims.
SHIPPING INDUSTRY
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There are different classifications in the
industry;
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regularity of service
cargo
ship
charter type
SHIPPING INDUSTRY
The type of merchant vessel employed on a trade route is
determined basically by the traffic carried.
There were 3 main divisions;
1.
2.
3.
Liner
Tramps
Specialized vessels (tankers)
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A tramp may be put on a liner berth to compete for liner
cargoes. Conversely liners may at times carry tramp
cargoes.
MARITIME TRANSPORTATION INDUSTRY
DIVISION AS PER TRAFFIC CARRIED
TRAMP
(BULK CARGO)
LINER
(GENERAL CARGO)
DRY BULK
LIQUID BULK
DRY CARGO
PRIMARY DB
Iron Ore
Coal
Grains
Crude Oil
Chemicals
Wine
Veg-Oil etc
GENERAL CARGO
Car
TV
Refrigerator
All cargoes that
needs special
handling and storage
SECONDARY DB
Nickel
Chrome
Sugar, Salt
INDUSTRY DIVISION ACCORDING
TO SHIP TYPES
 Reason for the division; all ships have specific
routes and all routes has specific trade and
economic issues.
 Ships mainly divided into 3 groups as;
 Dry cargo ships (Bulk Ships,Containers,RO/RO etc)
 Tankers
 Others
 Dry bulk ships and tankers are operating in tramp
trade.
 Container ships, MPV,Ro/Ro,Reefer operates in
liner trade.
History of Liners
 Scheduled trading began with the advent of steam power in
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1820s.
When ships became independent from the wind and were much
vulnerable to adverse weather, timetabling of services began to be
possible as steam power became more reliable and vessels larger
In 1860s regular scheduled services were a feature of many main
trade routes.
Liner trade ships operating on fixed routes with a fixed schedule.
Raw materials,manufactured goods mainly carried by container
ships which offer;
 very reliable,
 tightly scheduled and frequent services
 with a high level of cargo safety.
LINERS
 Operate on fixed routes and fixed sailing
schedules,serving a group of ports.
 Involves an adequately sized fleet and a fairly large
shore establishment.
 Compose ¼ of seaborne trade.
 Generally, cargoes loaded in containers.
 Enables unitization and carry heterogenous products
 General Cargoes: mainly consumption goods; clothes,
TVs,computers.
Liners
 After 90s container trade developed rapidly.
 Decrease after global crisis in 2008.
 Vessels are not loaded with one shipper’s cargo
 Even vessels are not full, voyage is completed as per
schedule.
 Supplied vessel capacity is important.
 Joint voyage planning, sharing vessel,common use of
port equipments; to keep in accordance with the
voyage determined and rigth planning of capacity.
SHIP TYPES IN LINER TRADE AND
THEIR CAPACITIES (2008)
CONTAINER SHIPS
4.395 SHIPS, 10.924.515 TEU
MULTI PURPOSE VESSELS
2.707 SHIPS, 1.139.859 TEU
CONTAINER SHIPS
GENERAL CARGO LINER
378 SHIPS, 5.34m. DWT
"DEEP SEA"
POST PANAMAX
(>3.000 TEU)
1.318 SHIPS
647.786 TEU
"MID GROUP"
PANAMAX,SUB-PANAMAX
(1-2.999 TEU)
1846 SHIPS
3.359.293 TEU
"FEEDER"
FEEDER,FEEDERMAX
(<1.000 TEU)
1.231 SHIPS
717.436 TEU
GENERAL CARGO TRAMP
726 SHIPS, 6.46m DWT
CONBULKER
389 SHIPS, 13.20m DWT
BARGE/HEAVY LIFT
41 SHIPS, 1.56m DWT
RoRo
1.067 SHIPS, 9.54m DWT
CAR CARRIERS
650 SHIPS, 9.34m DWT
REEFER
1.231 SHIPS, 330.1m CU.FT
TRAMP
 Bulk; unscheduled and irregular shipments
 Terms: Common trader, general trader, free
maritime transportation, unscheduled trader
 Ready to carry all types of dry bulk cargo from
any origin port to destination port at any time
and to provide the legacy and safety of the
voyage.
 Cargo based.
 Low value cargoes: coal,grain,ores, timber;
carried in complete shiploads.
TRAMP
 Many of the cargoes are seasonal.
 Homogenous characteristic, handled and
carried in bulk forms.
 Ships:Mid sized, unequipped and unassigned
for regular trade; with two to six holds,substandard.
 Often family owned companies tend to merge.
 Engaged under a document called a charter
party; on a time or voyage basis.
History of Tramps
 In the ancient times, Romans import grain from North
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Africa in bulk and threfore they built a special vessel fleet.
Since 19th century the world trade volume increases;
parallel to this bulk cargo transportation increased in order
to reach economies of scale.
The trade almost doubled after 90s till today.
Main reason; economic growth of China, India and South
East Asia at the end of 20th century.
Today 80 % of seaborne dry cargo trade is bulk.
Mostly bulk ship carries only one commodity at a time and
called bulk carrier.
They vary in size; a few hundred tonnes cargo carrying up
to 300.000 tonnes
General Factors Effect Dry Bulk Transportation
Demand
 International trade volume
 International trade structure
 Worldwide geographical distribution of raw
materials,agricultural and industrial products, finished
and semi-finished goods production and consumption
places.
 Essentials that form the market are especially market of
the cargo, transportation routes and vessels used in
maritime transportation.
 It’s important to understand the characterisrics of the
cargo, its own market and specific routes of the
transportation.
FIGURES
 Dry bulk cargo compose; 57% in tons, 47% in ton-
miles basis of tramp trade volume.
 33% of total maritime transportation in both tons
and ton-miles basis.
 Only dry bulk vessels compose 34% of total
world fleet.
SPECIALIZED VESSELS
 Cargo ships designed for carrying a particular
commodity as a result of demand.
 Ore carriers, sugar carriers and the tankers can be the
samples.
 The world’s tanker fleet is divided between tramp
operators (under a charter party) and those owned by
oil companies eg; BP VLGC).
 The larger proportion is owned and operated by oil
companies and employed on regular routes; operation
in this respect similiar with liner operator.
SPECIALIZED VESSELS
 Most independently owned tankers are on longterm charter to the oil companies.
 There is a worldwide network of tanker routes;
 Crude oil is transported from the oilfields to
refineries;
 Petroleum and fuel oil from refineries to
distribution centers (DCs) and bunkering ports
TANKERS
 Cargo ships designed to carry crude oil, petroleum
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products,natural gas and chemical substances, liquefied
natural gas (LNG), liquefied petroleum gas (LPG),
vegoils,wines etc
As a Tramp form, tankers have necessary technological
infrastructure to carry such goods.
Tankers cover 1/3 of world seaborne trade in tons
carried.
Oil crises,wars,political issues in world arena effects this
industry more than the other maritime transportation
industries.
Therefore, compared to others tanker trade is fluctuating
compared to others.
TANKERS
 Countries that export and import are distinct
 Importers; China, Japan and other Asian
countries,European countries, US
 Exporters;Saudi Arabia and other Middle East
countries, Iran, Iraq, United Arab Emirates and
Kuwait; Latin America, North Sea countries like
England and Norway.
 Routes are certain and long.
 Has a freight system; WORLDSCALE.
TANKERS
 The long distances between production and
consumption areas effects the demand on
transportation of the crude oil.
 Middle East countries with the 60% petroleum
reserves are far from the consumption areas.
 From Cape of Good Hope to Europe: 12.000
miles; to Japan 6.000 miles
 Long routes, petroleum (as an important input)
demand increase also increases the tanker trade
in ton-miles.
FIGURES
 Tankers compose; %43 in tons, 53% in ton-miles
basis of tramp trade.
 38% of total maritime transportation in ton-miles
basis.
 Considering dry bulk as 33% of total maritime
transportation; in ton miles basis tanker has the
highest portion.
 Tanker fleet accounts for 36% of world fleet.
LINER AND TRAMP COMPARISON
LINER
SERVICE
CARGO
SHIPPER
SHIP TYPES
VOYAGE
FREIGHT MARKET
SERVICE COST
SERVICE
ORGANISATIONS
SHIP OPERATION
PROFIT
Regular and consistent;whether
cargo is available or not
General cargo (high volume-high
value)
High variety
Heteregenous
Partly loads
More than one
Conventional Liners
RO/RO
Container
Lash
Seabee
Bacat
Mostly more than two ports
Mostly "port time" more than
"voyage time"
Determined
EXPENSIVE
Freight Conferences
Outsiders
Operate many vessels
Fleet design is a must
Fleet size varies upon tonnage
requirement and voyage
frequency
Profit margin is more determined
TRAMP
Irregular and discontinious if
cargo is not available
Bulk Cargo (low value)
Low variety
Homogenous
Shiploads
Generally one
Bulk Carriers
Tankers
Combined Vessels
Conventional Tramps
Mostly between two ports
Mostly "voyage time" more
than "port time"
Flexible and may change daily
CHEAP
Union of Shipowners
Possibility to serve with less
vessel
Service depend on the cargo
not the route
Profit margin is fluctuating due
to market conditions
DRY BULK SHIPS AND
CAPACITIES
DRY BULK
CARGO SHIPS
HANDYSIZE
HANDYMAX
PANAMAX
CAPESIZE
CAPACITY
(CLARKSON)
10.000 -40.000 DWT
40.000 -60.000 DWT
60.000 -80.000 DWT
80.000 DWT<
CAPACITY
(LR-FAIRPLAY)
20.000 -34.999 DWT
35.000 -49.999 DWT
50.000 -79.999 DWT
80.000 DWT<
DRY BULK SHIPS AND THEIR
CARGOES
CARRIERS
CARGOES (SHARE IN TOTAL CARRIAGE IN %)
IRON ORE COAL GRAIN BAUXITE-ALUMINA PHOSPHATE
CAPESIZE 70% 45% 7%
PANAMAX 22% 40% 43%
45%
20%
HANDY
8% 15% 50%
55%
80%
 Vessels have their names according to their
characteristics.
 Panamax; the largest vessel that may pass
Panama Canal safely.
 Capesize has the highest capacity and can not
pass Suez Canal.
 Therefore trade route determined round Cape of
Good Hope.
TANKER CLASSIFICATION
TANKERS
HANDYSIZE
HANDYMAX
PANAMAX
AFRAMAX
SUEZMAX
VLCC/ULCC
CAPACITY
CAPACITY
(CLARKSON)
(LR-FAIRPLAY)
10.000 -40.000 DWT 20.000 -34.999 DWT
40.000 -60.000 DWT 35.000 -49.999 DWT
60.000 -80.000 DWT 50.000 -79.999 DWT
80.000 - 120.000 DWT 80.000 - 99.999 DWT
120.000-200.000 DWT 100.000 - 149.999 DWT
200.000 DWT <
150.000 - 299.999 DWT/ 300.000 DWT <
**AFRAMAX: Average Freight Rate Assessment – Tanker
freight tariff system.
TANKERS AND THEIR
CARGOES
CARGOES (SHARE IN TOTAL CARRIAGE IN %)
LIQUID TANKERS CRUDE OIL DIRTY PRODUCT CLEAN PRODUCT
ULCC/VLCC
60%
SUEZMAX
30%
5%
AFRAMAX
10%
35%
20%
PANAMAX & HANDY
60%
80%
Types of Tankers