Institute of Commercial Management | Qualification Subject

Maritime Economics

Main Topics of Study

Introduction to Shipping

  • Sea transport and the global economy
  • The origins of sea trade, 3000 BC to AD 1450
  • The global economy in the fifteenth century
  • Opening up global trade and commerce, 1450-1833
  • Liner and tramp shipping, 1833-1950
  • Container, bulk and air transport, 1950-2006
  • Lessons from 5,000 years of commercial shipping

The Organisation of the Shipping Market

  • Overview of the maritime industry
  • The international transport industry
  • Characteristics of sea transport demand
  • The sea transport system
  • The world merchant fleet
  • The cost of sea transport
  • The role of ports in the transport system
  • The shipping companies that run the business
  • The role of governments in shipping

Shipping Market Economics

  • Shipping market cycles
  • Introducing the shipping cycle
  • Characteristics of shipping market cycles
  • Shipping cycles and shipping risk
  • Overview of shipping cycles, 1741-1869
  • Tramp market cycles and shipping risk
  • Overview of shipping cycles, 1741-2007
  • Sailing ship cycles, 1741-1869
  • Tramp market cycles, 1869-1936
  • Bulk shipping market cycles, 1945-2008
  • Lessons from two centuries of cycles
  • Prediction of shipping cycles

Supply, Demand and Freight Rates

  • The shipping market model
  • Key influences on supply and demand
  • The demand for sea transport
  • The supply of sea transport
  • The freight rate mechanism

The Four Shipping Markets

  • The decisions facing shipowners
  • The four shipping markets
  • The freight market
  • The freight derivatives market
  • The sale and purchase market
  • The new building market
  • The demolition (recycling) market

Shipping Company Economics

  • Costs, revenue and cashflow
  • Cashflow and the art of survival
  • Financial performance and investment strategy
  • The costs of running ships
  • The capital cost of the ship
  • The revenue the ship earns
  • Shipping accounts – the framework for decisions
  • Four methods of computing the cashflow
  • Valuing merchant ships

Financing Ships and Shipping Companies

  • Ship finance and shipping economics
  • How ships have been financed in the past
  • The world financial system and types of finance
  • Financing ships with private funds
  • Financing ships with bank loans
  • Financing ships and shipping companies in the capital markets
  • Financing ships with special purpose companies
  • Analysing risk in ship finance
  • Dealing with default

Risk, Return and Shipping Company Economics

  • The performance of shipping investments
  • The shipping company investment model
  • Competition theory and the ‘normal’ profit
  • Pricing shipping risk

Seaborne Trade and Transport Systems

  • The geography of maritime trade
  • The value added by seaborne transport
  • Oceans, distances and transit times
  • The maritime trading network
  • Europe’s seaborne trade
  • North America’s seaborne trade, South America’s seaborne trade
  • Asia’s seaborne trade, Africa’s seaborne trade
  • The seaborne trade of the Middle East, Central Asia and Russia
  • The trade of Australia and Oceania

The Principles of Maritime Trade

  • The building-blocks of sea trade
  • The countries that trade by sea
  • Why countries trade
  • Differences in production costs
  • Trade due to differences in natural resources
  • Commodity trade cycles
  • The role of sea transport trade

The Transport of Bulk Cargoes

  • The commercial origins of bulk shipping
  • The bulk fleet
  • The bulk trades
  • The principles of bulk transport
  • Practical aspects of bulk transport
  • Liquid bulk transport
  • The crude oil trade
  • The oil products trade
  • The major dry bulk trades
  • The minor bulk trades

The Transport of Specialised Cargoes

  • Introduction to specialised shipping
  • The sea transport of chemicals
  • The liquefied petroleum gas trade
  • The liquefied natural gas trade
  • The transport of refrigerated cargo
  • Unit load cargo transport
  • Passenger shipping

The Transport of General Cargo

  • The origins of the liner operation
  • Economic principles of liner operation
  • General cargo and liner transport demand
  • The liner shipping routes
  • The liner companies
  • The liner fleet
  • The principles of liner service economics
  • Pricing liner services
  • Liner conferences and cooperative agreements
  • Container ports and terminals

The Merchant Fleet and Transport Supply

  • The ships that provide the transport
  • What type of ship?
  • Seven questions that define a design
  • Ships for the general cargo trades
  • Ships for the dry bulk trades
  • Ships for liquid bulk cargoes
  • Gas tankers
  • Non-cargo ships
  • Economic criteria for evaluating ship designs

The regulation of the Maritime Industry

  • How regulations affect maritime economics
  • Overview of the regulatory system
  • The classification societies
  • The law of the sea
  • The regulatory role of the flag state
  • How maritime laws are made
  • The International Maritime Organisation
  • The International Labour Organisation
  • The regulatory role of the coastal and port states
  • The regulation of competition in shipping

Maritime Forecasting and Market Research

  • The approach to maritime forecasting
  • Key elements of the forecast
  • Preparing for the forecast
  • Market forecasting methodologies
  • Market research methodology
  • Freight rate forecasting
  • Developing a scenario analysis
  • Analytical techniques
  • Forecasting problems

Example Candidate Response Booklet

Example Candidate Response (ECR) Booklets are a source of crucial information for Centres and Candidates as they use real candidate responses. We ask Senior Examiners to comment on five or more responses in terms of why the mark was awarded with commentary about how to improve the answer (if necessary).

Recommended Reading

Main Text:

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Maritime Economics – M. Stopford (Routledge)

Indicative Text:

Alternative Text and Further Reading:

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Maritime Economics Management and Marketing – A Branch (Routledge)

Lloyds List

Lloyds Shipping Economist