Maritime Economics: A Deep Dive into Shipping Markets and Regulations

This report delves into the intricacies of maritime economics, addressing key questions related to freight rates, cargo shipping, and the container shipping market. It begins by analyzing the challenges faced by the container shipping market, including fluctuating earnings and the impact of various factors on demand and supply, proposing solutions such as boosting commercial systems, improving operations, and leveraging networking and fleet services. The report then examines the effects of the Panama Canal expansion, highlighting its impact on U.S. ports, infrastructure, and trade, while also discussing its effects on the U.S. market and the benefits it provides to cargo owners. Finally, the report addresses the issue of shipping emissions, exploring measures to reduce harmful gases and their socio-economic impacts, including the role of regulations and corporate social responsibility (CSR) in the shipping industry. The report underscores the importance of innovation, analytical investment, and redesigning systems to improve the efficiency and sustainability of the maritime sector.

Running Head: Maritime Economics
Question And Answer

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Table of Contents
Question1:........................................................................................................................................2
Question 2:.......................................................................................................................................4
Question 3:.......................................................................................................................................7
Conclusion:......................................................................................................................................9
References......................................................................................................................................11

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In this present paper, we will discuss the question and answer related to the maritime economics
and the questions all related to the freight rate, cargo shipping, and the container shipping
market.
Question1: One of the famous container shipping markets is not that much fruitful since five
years. The things are getting the worse day - by-day and the earnings are quite fluctuating, and
the several factors are responsible for this. (Grammenos Costas et al. 2013) We can't blame one
factor for this there are so many factors that adversely affect the demand and supply of the
container shipping market. This industry assumes the good times, and now they are going
through very difficult time. It also assumes the untenable increase in the demand. But now the
problem is that people thing that it is not that much required. (Nguyen, Hong-Oanh, et al.
2016 )These problems which container shipping market are facing are actual and compelling,
and these problems cannot be solved by one company. Buried below is one of the challenges that
are faced by the container shipping market. The networking, operations and commercial are the
further challenges that are really crucial for the container shipping market .We can take an
example of sales that sometimes carriers confused with the charges that are received by the
customers, and sometimes they get failed in asking for the premium of the services in which the
shippers need to pay the more. (Nguyen, Hong-Oanh, et al. 2016 ) In fuel, there is more of
consumption than to the requirement. In the operations, they just follow the routes that cost to the
container shipping market. In the networking system, the uses the outdated models and they just
don't use the powerful methods such as algorithms to reduce the cost. Using the new innovations,
initiatives and creativity model help the company to drag the maximum profit and increase their
market to 10-20%.

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The following steps can be taken in order to boost up the sales and bring the container shipping
market back to their profit which is as follows:
 Boost up the commercial system: First of all, there is an urgent need to ship from the
cost-plus approach to the value creating things and the container shipping should
emphasize on the paying all the lines, and they should provide the best services. They
should go for the comprehensive commercial programs that are to focus from the
beginning to the end and help in bringing the best management things and also work on
the good quality.
 Making the operation activity stronger : We should focus greatly on the operations
part, and they should be under the great control of the carrier .They will prove to be one
of the best sources that will help in both the periods whether it is profit generating or not.
An urgent need to bring the bunker management and it will help in creating the savings
too. Moving to the procurement part and the consumption should be reduced. We should
also focus on the utilization of the assets. Proper utilization of the assets should be used.
 Better networking and fleet services: There is an urgent need for the networking and
the fleet services. There should be two moves that help them to increase by 6 to 12 % and
getting better .There are two options that are lease and the owning, but we go for the
leasing . Although leasing provides us the flexibility benefits sometimes it cost much
higher and increases the cost. Shippers should make bold decisions regarding the delivery
that is to do directly or making the interim hub. Leading lines help in solving the biggest
challenges and resolving these biggest conflicts.
 Building the cross team functions: There is a huge requirement of building the strong
cross-team functions, and it will help in building the best decisions and also works on the

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tradeoffs. It also helps in creating the quality and help in bringing the management. It
also focuses on the making the right decisions for our company
 Building the better performance : The container shipping market helps in the building
the performance, and it also helps in achieving the goals and objectives on the right time
and help us in reducing the cost and help in earning maximum profit.
 Redesign the system : As we all know that with the five years the container shipping
market are in the huge losses and in very poor conditions and we should redesign the
things again and get the things better day-by-day.
 Bringing the innovation techniques: Innovation refers to bringing something new or
modifying something so that it can be fruitful in few years. Innovation help in getting
better with the quality and help to drag the profit back.
 Analytical Investment: It helps to know about the financial condition of the company.
Analytical help in resolving the issues related to networking, commercial and the pricing.
It also helps in coming up with pricing and the company strategy.
Question 2: The question revolves around the were the effects of expanding the canal.
After 100 years the expansion was completed in 2015 .It is one of the most important
trade, and it focuses on the overall 5% of the cargo trade volume. But it has huge impacts
on the US ports and also on the infrastructure decision. Expansion helped in the transport
of the large container vessel, and it helps in reducing the cost, and it provides the way
from the East and West ports. It provides the services from the Far East and U.S. East and
Gulf Coast ports. It also helps the large vessel to improve the ability of the U.S. exports
to complete in the global market for the agricultural, energy and the various products.
The canal expansion helped in providing the way for transferring the large vessel, and the

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capacity is the 12-14 canals can go in a day. The features of the expansion of the canal
are as follows:
 More robust the U.S. canal ports: It helps in increasing the volume of the trade and the
huge containers can easily pass. It also increases the capacity of the transfer, and it acted
fruitful for the company.
 Help in building the good infrastructure: The expansion help in coming with the great
infrastructure facility and increasing the standard of living of the people.
 Help in using the foreign transshipment: It helps in using the foreign transshipment and
helps in improving the quality and the services of the transport. It also helps in managing
the things in a better way and effective way.
 It helps in building the Maritime Highway : The expansion help in building the maritime
highway and It also help in bringing the effective productivity and bringing the efficient
and effective methods to reduce the cost .
The effects are not only on the market, but there are huge effects on the market, U.S.
regions and on the infrastructure too. It also talks about the implementation of the public
policies for the benefits
 Effect on the U.S market: The light is thrown on the traffic and the expansion help in
saving a lot that is saving the operation cost. It also generated the opportunities for the
exports of the oil, coal, LPG and the petroleum. It helps in expanding the market for the
large vessels and which help in creating the great opportunities for the U.S. market. It has
widely effected the trade of the U.S. market. First of all, it helps in resolving the issue of
the carrier services through the water that is direct. Thus it is one of the comprehensive
technique that helps in creating the efficient and the effective techniques for transferring

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of the large vessel. Secondly, it focuses on transferring the 5,000 TEU, and now it has
increased in 15,000 TEU. It helps in saving the huge transport cost, or we can say it
emphasis on reducing the transport cost which helps in boosting the new opportunities for
the market, and also it focuses on reducing the cost and also help in diversifying the risk
of transferring the large vessels to its destination. Through the expansion help in earning
huge or we can say help in generating the huge profit. The average size of the ships has
been reduced from time to time, and it not only helps in saving but also helps in reducing
the cost. The cost reduction helps in resolving so many challenges. It also helps in
conducting the research which is really beneficial for the market. One of the biggest
advantages that it is providing to the people is that serving the large vessels. It also
provides various benefits to the market that are as follows :
 Providing the potential savings : It acts as one of the potential savings as it acts in
reducing the cost so automatically it as the cost cutter and automatically it will act as
potential saving for the company .
 Beneficial to the cargo owners: It is one of the benefits that is owned by the cargo
owners and in this cargo owners acted to be fruitful for them.
 New opportunities: It acted as wiser as the expansion helped in creating the best and
great opportunities for the market.
 The railroad's response need to be evaluated: In this, the responses of the railroads are
being evaluated so that they can work on it and can create huge productivity.
 Building the good infrastructure: It will help in creating the good infrastructure of the
U.S. regions and help in creating the high standard of living.

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 Making the policies that are beneficial to the public: The expansion of the canal help
in making the policies that are grateful to the productivity.
Question 3: The last question is being divided into two parts, and both the parts revolve
in the same directions that are of emission of the global gases and how it will help in
coming up with the clean and clear environment.
a) First, of emission refers to the reduction of the harmful gases that are adversely
affecting our environment. So the various measures are taken to reduce this emission.
Shipping emission is increasing day –by-day because to reduce the global scale trade.
(Nguyen, Hong-Oanh, et al. 2014 ) The shipping really affects the air quality of the
area, and thus it will add to the air pollution. In order to reduce the air quality in the
urban area the shipping emission steps are being taken to reduce the effects on the
environment .It also helps in reducing the global chemical pollutants and the
composition of the particles . But the shipping emission does not only focus on these
two, but it will enhance the formulation of the new particles that will help in purifying
the air of the urban areas and reducing the pollutants from the environment and
cleaning the air and bringing the good quality air in the urban area. The air emission
programs that has taken place are as follows :
 The International Compensation Fund (ICF)
 Marine Emission Trade Scheme (METS)
Now we will discuss its socio-economic impacts that it has shipping industry we can
say that the economic factors are that first of all it will help in reducing the cost and it
will also help in the effectiveness and the reduction potential, and it act as the cost
saving and it focus on removing the global pollutants from the environment and

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bringing the efficiency in the environment. (Nguyen, Hong-Oanh, et al. 2016 ) It also
focuses on the consumption of the cost per tones. The socio-economic effect is that
the consumption is reduced day by day.
b) The question revolves around the examples that how the shipping industry revolves
around these regulations. They have stated that these regulation are closely related to
the CSR, and we know the CSR is the corporate social responsibility, and it focuses
that we should not only think of our profit, but we should think of the environment
too. In this way, the shipping industry also takes the initiatives to contribute to the
clean and the healthy environment. (Branch, Alan et al. 2014) The following
companies reacted to these regulations are as follows :
 Alfonse Hakims Oy AB is one of the shipping industry, and they have reacted
in a very positive manner. It also focuses on the reducing the chemical from
the environment.
 Containership Ltd is one of the largest shipping industries, and it follows the
ISO standards in order to reduce the wastage and also the gray water
recycling. It also focuses on the carbon footprint. It also focuses on the all the
degradations that are being caused by this to be reduced. So it also acted in a
positive manner.
 ESL Shipping Ltd is one of the dry cargo companies, and it focuses on using
the safety measures, and it focuses on using the skilled workers and also the
safety vessels to reduce the risk. In this way, it acted in a positive manner.
 Finnlines is one of the cargo and freight company. It focuses on the
environmental safety, and it also throws light on the sustainable development

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too. We can say that this company also reacted in a very positive and efficient
manner.
 Neste Shipping Oy: It is one of the energy sector companies, and it focuses on
everything that is it covers the social responsibility, financial responsibility
and the economic responsibility that helps them to be significant and acted in
a very positive and happy manner to all these regulations.
 Tallink Silja : It is one of the transport company and also transport company
and also works on the social responsibility and it also works on the following
that is :
a) ISO 14000 it follows the ISO 14000
b) It also provide the training to the crew members
c) Safety management techniques are also taken place.
d) It is focusing on the providing the safety to its members
This is one of the largest companies that has worked according to the
regulation and acted in a positive manner. Thus there are so many
examples that show that the companies are really working on this
regulation and it will help to bring the good quality of air in the
environment.
Conclusion: At the end, we can conclude that the whole question and
answer focuses on the Maritime economics.( Branch, Alan et al. 2013 ) In
the first question, it talks of the efficient methods that can be taken to
improve the container shipping market. In the second question, the
expansion of the canal has affected the U.S. trade. The third questions

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revolve around the regulations that have affected the markets and what are
the examples of these regulations .

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References
Grammenos, Costas. The handbook of maritime economics and business. Taylor & Francis,
2013.
Branch, Alan, and Martin Stopford. Maritime economics. Routledge, 2013.
Wang, Grace WY, Wayne Talley, and Mary R. Brooks. "Maritime Economics in a Post-
Expansion Panama Canal Era." (2016): 161-163.
Nguyen, Hong-Oanh, et al. "Measuring port efficiency using bootstrapped DEA: the case of
Vietnamese ports." Maritime Policy & Management 43.5 (2016): 644-659.
Karakitsos, Elias, and Lambros Varnavides. Maritime Economics: A macroeconomic approach.
Springer, 2014.
Talley, Wayne K., and ManWo Ng. "Maritime transport chain choice by carriers, ports, and
shippers." International Journal of Production Economics 142.2 (2013): 311-316.
Parola, Francesco, Giovanni Satta, and Photis M. Panayides. "Corporate strategies and
profitability of maritime logistics firms." Maritime Economics & Logistics 17.1 (2015): 52-78.