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

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